Correlation Between Biglari Holdings and Fortune Rise
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Fortune Rise 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 Fortune Rise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Fortune Rise Acquisition, you can compare the effects of market volatilities on Biglari Holdings and Fortune Rise 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 Fortune Rise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Fortune Rise.
Diversification Opportunities for Biglari Holdings and Fortune Rise
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Biglari and Fortune is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Fortune Rise Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Rise Acquisition 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 Fortune Rise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Rise Acquisition has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Fortune Rise go up and down completely randomly.
Pair Corralation between Biglari Holdings and Fortune Rise
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 3.9 times more return on investment than Fortune Rise. However, Biglari Holdings is 3.9 times more volatile than Fortune Rise Acquisition. It trades about 0.05 of its potential returns per unit of risk. Fortune Rise Acquisition is currently generating about 0.06 per unit of risk. If you would invest 14,182 in Biglari Holdings on August 30, 2024 and sell it today you would earn a total of 7,318 from holding Biglari Holdings or generate 51.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.58% |
| Values | Daily Returns |
Biglari Holdings vs. Fortune Rise Acquisition
Performance |
| Timeline |
| Biglari Holdings |
| Fortune Rise Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Biglari Holdings and Fortune Rise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Fortune Rise
The main advantage of trading using opposite Biglari Holdings and Fortune Rise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Fortune Rise 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 Fortune Rise will offset losses from the drop in Fortune Rise's long position.| Biglari Holdings vs. Chipotle Mexican Grill | Biglari Holdings vs. Yum Brands | Biglari Holdings vs. The Wendys Co | Biglari Holdings vs. McDonalds |
| Fortune Rise vs. Kaltura | Fortune Rise vs. Q2 Holdings | Fortune Rise vs. Fidus Investment Corp | Fortune Rise vs. Bank of America |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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