Correlation Between Biglari Holdings and Polestar Automotive
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Polestar Automotive 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 Polestar Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Polestar Automotive Holding, you can compare the effects of market volatilities on Biglari Holdings and Polestar Automotive 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 Polestar Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Polestar Automotive.
Diversification Opportunities for Biglari Holdings and Polestar Automotive
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biglari and Polestar is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Polestar Automotive Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polestar Automotive 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 Polestar Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polestar Automotive has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Polestar Automotive go up and down completely randomly.
Pair Corralation between Biglari Holdings and Polestar Automotive
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.25 times more return on investment than Polestar Automotive. However, Biglari Holdings is 3.92 times less risky than Polestar Automotive. It trades about 0.05 of its potential returns per unit of risk. Polestar Automotive Holding is currently generating about -0.02 per unit of risk. If you would invest 14,183 in Biglari Holdings on August 24, 2024 and sell it today you would earn a total of 6,458 from holding Biglari Holdings or generate 45.53% 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. Polestar Automotive Holding
Performance |
| Timeline |
| Biglari Holdings |
| Polestar Automotive |
Biglari Holdings and Polestar Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Polestar Automotive
The main advantage of trading using opposite Biglari Holdings and Polestar Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Polestar Automotive 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 Polestar Automotive will offset losses from the drop in Polestar Automotive's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Polestar Automotive vs. Lucid Group | Polestar Automotive vs. Canoo Inc | Polestar Automotive vs. Rivian Automotive | Polestar Automotive vs. Aston Martin Lagonda |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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