Correlation Between Biglari Holdings and Capital Clean
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Capital Clean 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 Capital Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Capital Clean Energy, you can compare the effects of market volatilities on Biglari Holdings and Capital Clean 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 Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Capital Clean.
Diversification Opportunities for Biglari Holdings and Capital Clean
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Biglari and Capital is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy 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 Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Capital Clean go up and down completely randomly.
Pair Corralation between Biglari Holdings and Capital Clean
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 1.69 times more return on investment than Capital Clean. However, Biglari Holdings is 1.69 times more volatile than Capital Clean Energy. It trades about 0.39 of its potential returns per unit of risk. Capital Clean Energy is currently generating about -0.04 per unit of risk. If you would invest 18,548 in Biglari Holdings on September 13, 2024 and sell it today you would earn a total of 4,531 from holding Biglari Holdings or generate 24.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Capital Clean Energy
Performance |
| Timeline |
| Biglari Holdings |
| Capital Clean Energy |
Biglari Holdings and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Capital Clean
The main advantage of trading using opposite Biglari Holdings and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Capital Clean vs. Oceanpal | Capital Clean vs. Safe Bulkers | Capital Clean vs. Safe Bulkers | Capital Clean vs. Safe Bulkers |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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