Correlation Between Biglari Holdings and Safety Shot
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Safety Shot 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 Safety Shot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Safety Shot, you can compare the effects of market volatilities on Biglari Holdings and Safety Shot 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 Safety Shot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Safety Shot.
Diversification Opportunities for Biglari Holdings and Safety Shot
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Biglari and Safety is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot 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 Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Safety Shot go up and down completely randomly.
Pair Corralation between Biglari Holdings and Safety Shot
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.66 times more return on investment than Safety Shot. However, Biglari Holdings is 1.52 times less risky than Safety Shot. It trades about 0.23 of its potential returns per unit of risk. Safety Shot is currently generating about -0.26 per unit of risk. If you would invest 21,061 in Biglari Holdings on September 21, 2024 and sell it today you would earn a total of 3,309 from holding Biglari Holdings or generate 15.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Safety Shot
Performance |
| Timeline |
| Biglari Holdings |
| Safety Shot |
Biglari Holdings and Safety Shot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Safety Shot
The main advantage of trading using opposite Biglari Holdings and Safety Shot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Safety Shot 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 Safety Shot will offset losses from the drop in Safety Shot's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Safety Shot vs. Sellas Life Sciences | Safety Shot vs. Apogee Therapeutics, Common | Safety Shot vs. Biglari Holdings | Safety Shot vs. Tarsus Pharmaceuticals |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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