Correlation Between Biglari Holdings and Sturm Ruger
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Sturm Ruger 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 Sturm Ruger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Sturm Ruger, you can compare the effects of market volatilities on Biglari Holdings and Sturm Ruger 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 Sturm Ruger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Sturm Ruger.
Diversification Opportunities for Biglari Holdings and Sturm Ruger
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biglari and Sturm is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Sturm Ruger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sturm Ruger 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 Sturm Ruger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sturm Ruger has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Sturm Ruger go up and down completely randomly.
Pair Corralation between Biglari Holdings and Sturm Ruger
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 1.4 times more return on investment than Sturm Ruger. However, Biglari Holdings is 1.4 times more volatile than Sturm Ruger. It trades about 0.04 of its potential returns per unit of risk. Sturm Ruger is currently generating about -0.05 per unit of risk. If you would invest 17,153 in Biglari Holdings on November 9, 2024 and sell it today you would earn a total of 6,180 from holding Biglari Holdings or generate 36.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Sturm Ruger
Performance |
| Timeline |
| Biglari Holdings |
| Sturm Ruger |
Biglari Holdings and Sturm Ruger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Sturm Ruger
The main advantage of trading using opposite Biglari Holdings and Sturm Ruger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Sturm Ruger 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 Sturm Ruger will offset losses from the drop in Sturm Ruger's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Sturm Ruger vs. Ammo Inc | Sturm Ruger vs. Kratos Defense Security | Sturm Ruger vs. VSE Corporation | Sturm Ruger vs. Ammo Preferred |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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