Correlation Between Biglari Holdings and Dianthus Therapeutics
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Dianthus Therapeutics 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 Dianthus Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Dianthus Therapeutics, you can compare the effects of market volatilities on Biglari Holdings and Dianthus Therapeutics 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 Dianthus Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Dianthus Therapeutics.
Diversification Opportunities for Biglari Holdings and Dianthus Therapeutics
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Biglari and Dianthus is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Dianthus Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dianthus Therapeutics 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 Dianthus Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dianthus Therapeutics has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Dianthus Therapeutics go up and down completely randomly.
Pair Corralation between Biglari Holdings and Dianthus Therapeutics
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.38 times more return on investment than Dianthus Therapeutics. However, Biglari Holdings is 2.6 times less risky than Dianthus Therapeutics. It trades about 0.24 of its potential returns per unit of risk. Dianthus Therapeutics is currently generating about -0.05 per unit of risk. If you would invest 21,216 in Biglari Holdings on September 15, 2024 and sell it today you would earn a total of 1,867 from holding Biglari Holdings or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Dianthus Therapeutics
Performance |
| Timeline |
| Biglari Holdings |
| Dianthus Therapeutics |
Biglari Holdings and Dianthus Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Dianthus Therapeutics
The main advantage of trading using opposite Biglari Holdings and Dianthus Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Dianthus Therapeutics 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 Dianthus Therapeutics will offset losses from the drop in Dianthus Therapeutics' long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Dianthus Therapeutics vs. Biglari Holdings | Dianthus Therapeutics vs. SunOpta | Dianthus Therapeutics vs. Ryman Hospitality Properties | Dianthus Therapeutics vs. Ark Restaurants Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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