Correlation Between Biglari Holdings and Catheter Precision
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Catheter Precision 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 Catheter Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Catheter Precision, you can compare the effects of market volatilities on Biglari Holdings and Catheter Precision 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 Catheter Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Catheter Precision.
Diversification Opportunities for Biglari Holdings and Catheter Precision
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biglari and Catheter is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Catheter Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catheter Precision 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 Catheter Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catheter Precision has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Catheter Precision go up and down completely randomly.
Pair Corralation between Biglari Holdings and Catheter Precision
Allowing for the 90-day total investment horizon Biglari Holdings is expected to under-perform the Catheter Precision. But the stock apears to be less risky and, when comparing its historical volatility, Biglari Holdings is 3.22 times less risky than Catheter Precision. The stock trades about -0.31 of its potential returns per unit of risk. The Catheter Precision is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Catheter Precision on October 29, 2024 and sell it today you would lose (1.00) from holding Catheter Precision or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Catheter Precision
Performance |
| Timeline |
| Biglari Holdings |
| Catheter Precision |
Biglari Holdings and Catheter Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Catheter Precision
The main advantage of trading using opposite Biglari Holdings and Catheter Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Catheter Precision 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 Catheter Precision will offset losses from the drop in Catheter Precision's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Catheter Precision vs. Allient | Catheter Precision vs. MYT Netherlands Parent | Catheter Precision vs. Renesas Electronics | Catheter Precision vs. IPG Photonics |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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