Correlation Between Brinker International and JAPAN TOBACCO
Can any of the company-specific risk be diversified away by investing in both Brinker International and JAPAN TOBACCO 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 Brinker International and JAPAN TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and JAPAN TOBACCO UNSPADR12, you can compare the effects of market volatilities on Brinker International and JAPAN TOBACCO 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 Brinker International with a short position of JAPAN TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and JAPAN TOBACCO.
Diversification Opportunities for Brinker International and JAPAN TOBACCO
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brinker and JAPAN is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and JAPAN TOBACCO UNSPADR12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN TOBACCO UNSPADR12 and Brinker International 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 Brinker International are associated (or correlated) with JAPAN TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN TOBACCO UNSPADR12 has no effect on the direction of Brinker International i.e., Brinker International and JAPAN TOBACCO go up and down completely randomly.
Pair Corralation between Brinker International and JAPAN TOBACCO
Assuming the 90 days horizon Brinker International is expected to generate 1.6 times more return on investment than JAPAN TOBACCO. However, Brinker International is 1.6 times more volatile than JAPAN TOBACCO UNSPADR12. It trades about 0.14 of its potential returns per unit of risk. JAPAN TOBACCO UNSPADR12 is currently generating about 0.06 per unit of risk. If you would invest 3,520 in Brinker International on September 12, 2024 and sell it today you would earn a total of 8,480 from holding Brinker International or generate 240.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Brinker International vs. JAPAN TOBACCO UNSPADR12
Performance |
| Timeline |
| Brinker International |
| JAPAN TOBACCO UNSPADR12 |
Brinker International and JAPAN TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and JAPAN TOBACCO
The main advantage of trading using opposite Brinker International and JAPAN TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, JAPAN TOBACCO 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 JAPAN TOBACCO will offset losses from the drop in JAPAN TOBACCO's long position.| Brinker International vs. FANDIFI TECHNOLOGY P | Brinker International vs. SIEM OFFSHORE NEW | Brinker International vs. Check Point Software | Brinker International vs. Cars Inc |
| JAPAN TOBACCO vs. British American Tobacco | JAPAN TOBACCO vs. British American Tobacco | JAPAN TOBACCO vs. Japan Tobacco |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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