Correlation Between Biglari Holdings and Mamas Creations
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Mamas Creations 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 Mamas Creations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Mamas Creations, you can compare the effects of market volatilities on Biglari Holdings and Mamas Creations 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 Mamas Creations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Mamas Creations.
Diversification Opportunities for Biglari Holdings and Mamas Creations
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Biglari and Mamas is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Mamas Creations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mamas Creations 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 Mamas Creations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mamas Creations has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Mamas Creations go up and down completely randomly.
Pair Corralation between Biglari Holdings and Mamas Creations
Allowing for the 90-day total investment horizon Biglari Holdings is expected to under-perform the Mamas Creations. But the stock apears to be less risky and, when comparing its historical volatility, Biglari Holdings is 1.82 times less risky than Mamas Creations. The stock trades about -0.44 of its potential returns per unit of risk. The Mamas Creations is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 756.00 in Mamas Creations on October 25, 2024 and sell it today you would earn a total of 23.00 from holding Mamas Creations or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Mamas Creations
Performance |
| Timeline |
| Biglari Holdings |
| Mamas Creations |
Biglari Holdings and Mamas Creations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Mamas Creations
The main advantage of trading using opposite Biglari Holdings and Mamas Creations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Mamas Creations 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 Mamas Creations will offset losses from the drop in Mamas Creations' long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Mamas Creations vs. Ingredion Incorporated | Mamas Creations vs. Hanover Foods | Mamas Creations vs. BBB Foods | Mamas Creations vs. Harmony Gold Mining |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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