Correlation Between Biglari Holdings and Bagger Daves
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Bagger Daves at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Biglari Holdings and Bagger Daves into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Bagger Daves Burger, you can compare the effects of market volatilities on Biglari Holdings and Bagger Daves and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Biglari Holdings with a short position of Bagger Daves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Bagger Daves.
Diversification Opportunities for Biglari Holdings and Bagger Daves
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Biglari and Bagger is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Bagger Daves Burger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bagger Daves Burger and Biglari Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Biglari Holdings are associated (or correlated) with Bagger Daves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bagger Daves Burger has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Bagger Daves go up and down completely randomly.
Pair Corralation between Biglari Holdings and Bagger Daves
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 1.92 times less return on investment than Bagger Daves. But when comparing it to its historical volatility, Biglari Holdings is 2.88 times less risky than Bagger Daves. It trades about 0.07 of its potential returns per unit of risk. Bagger Daves Burger is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5.45 in Bagger Daves Burger on August 24, 2024 and sell it today you would earn a total of 1.55 from holding Bagger Daves Burger or generate 28.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Biglari Holdings vs. Bagger Daves Burger
Performance |
| Timeline |
| Biglari Holdings |
| Bagger Daves Burger |
Biglari Holdings and Bagger Daves Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Bagger Daves
The main advantage of trading using opposite Biglari Holdings and Bagger Daves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Bagger Daves can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bagger Daves will offset losses from the drop in Bagger Daves' long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Bagger Daves vs. Alsea SAB de | Bagger Daves vs. Marstons PLC | Bagger Daves vs. Marstons PLC | Bagger Daves vs. Spot Coffee |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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