Correlation Between Biglari Holdings and Stoneridge
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Stoneridge 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 Stoneridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Stoneridge, you can compare the effects of market volatilities on Biglari Holdings and Stoneridge 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 Stoneridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Stoneridge.
Diversification Opportunities for Biglari Holdings and Stoneridge
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biglari and Stoneridge is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Stoneridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoneridge 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 Stoneridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoneridge has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Stoneridge go up and down completely randomly.
Pair Corralation between Biglari Holdings and Stoneridge
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.74 times more return on investment than Stoneridge. However, Biglari Holdings is 1.35 times less risky than Stoneridge. It trades about 0.02 of its potential returns per unit of risk. Stoneridge is currently generating about -0.06 per unit of risk. If you would invest 19,105 in Biglari Holdings on August 27, 2024 and sell it today you would earn a total of 1,536 from holding Biglari Holdings or generate 8.04% 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. Stoneridge
Performance |
| Timeline |
| Biglari Holdings |
| Stoneridge |
Biglari Holdings and Stoneridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Stoneridge
The main advantage of trading using opposite Biglari Holdings and Stoneridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Stoneridge 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 Stoneridge will offset losses from the drop in Stoneridge's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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