Correlation Between Biglari Holdings and SES AI
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and SES AI 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 SES AI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and SES AI Corp, you can compare the effects of market volatilities on Biglari Holdings and SES AI 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 SES AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and SES AI.
Diversification Opportunities for Biglari Holdings and SES AI
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biglari and SES is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and SES AI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES AI Corp 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 SES AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES AI Corp has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and SES AI go up and down completely randomly.
Pair Corralation between Biglari Holdings and SES AI
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.32 times more return on investment than SES AI. However, Biglari Holdings is 3.1 times less risky than SES AI. It trades about 0.18 of its potential returns per unit of risk. SES AI Corp is currently generating about -0.24 per unit of risk. If you would invest 17,201 in Biglari Holdings on August 31, 2024 and sell it today you would earn a total of 4,299 from holding Biglari Holdings or generate 24.99% 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. SES AI Corp
Performance |
| Timeline |
| Biglari Holdings |
| SES AI Corp |
Biglari Holdings and SES AI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and SES AI
The main advantage of trading using opposite Biglari Holdings and SES AI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, SES AI 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 SES AI will offset losses from the drop in SES AI's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| SES AI vs. Cooper Stnd | SES AI vs. Motorcar Parts of | SES AI vs. American Axle Manufacturing | SES AI vs. Stoneridge |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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