Correlation Between Biglari Holdings and Pinstripes Holdings
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Pinstripes Holdings 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 Pinstripes Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Pinstripes Holdings, you can compare the effects of market volatilities on Biglari Holdings and Pinstripes Holdings 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 Pinstripes Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Pinstripes Holdings.
Diversification Opportunities for Biglari Holdings and Pinstripes Holdings
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biglari and Pinstripes is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Pinstripes Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinstripes Holdings 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 Pinstripes Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinstripes Holdings has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Pinstripes Holdings go up and down completely randomly.
Pair Corralation between Biglari Holdings and Pinstripes Holdings
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.33 times more return on investment than Pinstripes Holdings. However, Biglari Holdings is 3.03 times less risky than Pinstripes Holdings. It trades about 0.05 of its potential returns per unit of risk. Pinstripes Holdings is currently generating about -0.14 per unit of risk. If you would invest 19,771 in Biglari Holdings on October 26, 2024 and sell it today you would earn a total of 2,434 from holding Biglari Holdings or generate 12.31% 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. Pinstripes Holdings
Performance |
| Timeline |
| Biglari Holdings |
| Pinstripes Holdings |
Biglari Holdings and Pinstripes Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Pinstripes Holdings
The main advantage of trading using opposite Biglari Holdings and Pinstripes Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Pinstripes Holdings 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 Pinstripes Holdings will offset losses from the drop in Pinstripes Holdings' long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Pinstripes Holdings vs. Summit Hotel Properties | Pinstripes Holdings vs. Starbucks | Pinstripes Holdings vs. CECO Environmental Corp | Pinstripes Holdings vs. BJs Restaurants |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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