Correlation Between Biglari Holdings and Green Brick
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Green Brick 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 Green Brick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Green Brick Partners, you can compare the effects of market volatilities on Biglari Holdings and Green Brick 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 Green Brick. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Green Brick.
Diversification Opportunities for Biglari Holdings and Green Brick
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biglari and Green is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Green Brick Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Brick Partners 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 Green Brick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Brick Partners has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Green Brick go up and down completely randomly.
Pair Corralation between Biglari Holdings and Green Brick
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 1.01 times more return on investment than Green Brick. However, Biglari Holdings is 1.01 times more volatile than Green Brick Partners. It trades about 0.3 of its potential returns per unit of risk. Green Brick Partners is currently generating about -0.08 per unit of risk. If you would invest 17,300 in Biglari Holdings on August 31, 2024 and sell it today you would earn a total of 3,743 from holding Biglari Holdings or generate 21.64% 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. Green Brick Partners
Performance |
| Timeline |
| Biglari Holdings |
| Green Brick Partners |
Biglari Holdings and Green Brick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Green Brick
The main advantage of trading using opposite Biglari Holdings and Green Brick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Green Brick 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 Green Brick will offset losses from the drop in Green Brick's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Green Brick vs. Taylor Morn Home | Green Brick vs. Century Communities | Green Brick vs. Beazer Homes USA | Green Brick vs. Meritage |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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