Correlation Between Biglari Holdings and Papa Johns
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Papa Johns 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 Papa Johns into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Papa Johns International, you can compare the effects of market volatilities on Biglari Holdings and Papa Johns 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 Papa Johns. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Papa Johns.
Diversification Opportunities for Biglari Holdings and Papa Johns
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biglari and Papa is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Papa Johns International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papa Johns International 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 Papa Johns. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papa Johns International has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Papa Johns go up and down completely randomly.
Pair Corralation between Biglari Holdings and Papa Johns
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 1.08 times more return on investment than Papa Johns. However, Biglari Holdings is 1.08 times more volatile than Papa Johns International. It trades about 0.31 of its potential returns per unit of risk. Papa Johns International is currently generating about -0.07 per unit of risk. If you would invest 17,261 in Biglari Holdings on August 28, 2024 and sell it today you would earn a total of 3,437 from holding Biglari Holdings or generate 19.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Papa Johns International
Performance |
| Timeline |
| Biglari Holdings |
| Papa Johns International |
Biglari Holdings and Papa Johns Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Papa Johns
The main advantage of trading using opposite Biglari Holdings and Papa Johns positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Papa Johns 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 Papa Johns will offset losses from the drop in Papa Johns' long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Papa Johns vs. Yum Brands | Papa Johns vs. Wingstop | Papa Johns vs. Darden Restaurants | Papa Johns vs. Chipotle Mexican Grill |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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