Correlation Between Biglari Holdings and Bright Scholar
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Bright Scholar 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 Bright Scholar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Bright Scholar Education, you can compare the effects of market volatilities on Biglari Holdings and Bright Scholar 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 Bright Scholar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Bright Scholar.
Diversification Opportunities for Biglari Holdings and Bright Scholar
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biglari and Bright is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Bright Scholar Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Scholar Education 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 Bright Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Scholar Education has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Bright Scholar go up and down completely randomly.
Pair Corralation between Biglari Holdings and Bright Scholar
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.41 times more return on investment than Bright Scholar. However, Biglari Holdings is 2.43 times less risky than Bright Scholar. It trades about 0.05 of its potential returns per unit of risk. Bright Scholar Education is currently generating about 0.01 per unit of risk. If you would invest 14,183 in Biglari Holdings on August 24, 2024 and sell it today you would earn a total of 6,458 from holding Biglari Holdings or generate 45.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Biglari Holdings vs. Bright Scholar Education
Performance |
| Timeline |
| Biglari Holdings |
| Bright Scholar Education |
Biglari Holdings and Bright Scholar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Bright Scholar
The main advantage of trading using opposite Biglari Holdings and Bright Scholar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Bright Scholar 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 Bright Scholar will offset losses from the drop in Bright Scholar's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Bright Scholar vs. Laureate Education | Bright Scholar vs. China Liberal Education | Bright Scholar vs. Adtalem Global Education | Bright Scholar vs. Grand Canyon Education |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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