Correlation Between Biglari Holdings and Trump Media
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Trump Media 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 Trump Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Trump Media Technology, you can compare the effects of market volatilities on Biglari Holdings and Trump Media 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 Trump Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Trump Media.
Diversification Opportunities for Biglari Holdings and Trump Media
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Biglari and Trump is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Trump Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trump Media Technology 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 Trump Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trump Media Technology has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Trump Media go up and down completely randomly.
Pair Corralation between Biglari Holdings and Trump Media
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 4.71 times less return on investment than Trump Media. But when comparing it to its historical volatility, Biglari Holdings is 5.15 times less risky than Trump Media. It trades about 0.05 of its potential returns per unit of risk. Trump Media Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,315 in Trump Media Technology on September 3, 2024 and sell it today you would lose (153.00) from holding Trump Media Technology or give up 6.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 35.35% |
| Values | Daily Returns |
Biglari Holdings vs. Trump Media Technology
Performance |
| Timeline |
| Biglari Holdings |
| Trump Media Technology |
Biglari Holdings and Trump Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Trump Media
The main advantage of trading using opposite Biglari Holdings and Trump Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Trump Media 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 Trump Media will offset losses from the drop in Trump Media's long position.| Biglari Holdings vs. Highway Holdings Limited | Biglari Holdings vs. QCR Holdings | Biglari Holdings vs. Partner Communications | Biglari Holdings vs. Acumen Pharmaceuticals |
| Trump Media vs. Weyco Group | Trump Media vs. Church Dwight | Trump Media vs. World Houseware Limited | Trump Media vs. Cedar Realty Trust |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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