Correlation Between Bloomin Brands and Pinstripes Holdings
Can any of the company-specific risk be diversified away by investing in both Bloomin Brands and Pinstripes Holdings 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 Bloomin Brands and Pinstripes Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomin Brands and Pinstripes Holdings, you can compare the effects of market volatilities on Bloomin Brands and Pinstripes Holdings 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 Bloomin Brands with a short position of Pinstripes Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomin Brands and Pinstripes Holdings.
Diversification Opportunities for Bloomin Brands and Pinstripes Holdings
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bloomin and Pinstripes is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bloomin Brands and Pinstripes Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinstripes Holdings and Bloomin Brands 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 Bloomin Brands are associated (or correlated) with Pinstripes Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinstripes Holdings has no effect on the direction of Bloomin Brands i.e., Bloomin Brands and Pinstripes Holdings go up and down completely randomly.
Pair Corralation between Bloomin Brands and Pinstripes Holdings
Given the investment horizon of 90 days Bloomin Brands is expected to generate 0.4 times more return on investment than Pinstripes Holdings. However, Bloomin Brands is 2.48 times less risky than Pinstripes Holdings. It trades about -0.02 of its potential returns per unit of risk. Pinstripes Holdings is currently generating about -0.06 per unit of risk. If you would invest 1,926 in Bloomin Brands on August 24, 2024 and sell it today you would lose (647.00) from holding Bloomin Brands or give up 33.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomin Brands vs. Pinstripes Holdings
Performance |
| Timeline |
| Bloomin Brands |
| Pinstripes Holdings |
Bloomin Brands and Pinstripes Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomin Brands and Pinstripes Holdings
The main advantage of trading using opposite Bloomin Brands and Pinstripes Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomin Brands position performs unexpectedly, Pinstripes Holdings 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 Pinstripes Holdings will offset losses from the drop in Pinstripes Holdings' long position.| Bloomin Brands vs. Dine Brands Global | Bloomin Brands vs. BJs Restaurants | Bloomin Brands vs. The Cheesecake Factory | Bloomin Brands vs. Brinker International |
| Pinstripes Holdings vs. Bloomin Brands | Pinstripes Holdings vs. BJs Restaurants | Pinstripes Holdings vs. Darden Restaurants | Pinstripes Holdings vs. Wingstop |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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