Correlation Between Biglari Holdings and Dennys Corp
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Dennys Corp 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 Dennys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Dennys Corp, you can compare the effects of market volatilities on Biglari Holdings and Dennys Corp 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 Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Dennys Corp.
Diversification Opportunities for Biglari Holdings and Dennys Corp
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Biglari and Dennys is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp 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 Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Dennys Corp go up and down completely randomly.
Pair Corralation between Biglari Holdings and Dennys Corp
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.78 times more return on investment than Dennys Corp. However, Biglari Holdings is 1.28 times less risky than Dennys Corp. It trades about 0.07 of its potential returns per unit of risk. Dennys Corp is currently generating about -0.06 per unit of risk. If you would invest 15,467 in Biglari Holdings on August 28, 2024 and sell it today you would earn a total of 5,231 from holding Biglari Holdings or generate 33.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Dennys Corp
Performance |
| Timeline |
| Biglari Holdings |
| Dennys Corp |
Biglari Holdings and Dennys Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Dennys Corp
The main advantage of trading using opposite Biglari Holdings and Dennys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Dennys Corp 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 Dennys Corp will offset losses from the drop in Dennys Corp's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Dennys Corp vs. Brinker International | Dennys Corp vs. Bloomin Brands | Dennys Corp vs. Jack In The | Dennys Corp vs. BJs Restaurants |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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