Correlation Between Bloomin Brands and United Parks
Can any of the company-specific risk be diversified away by investing in both Bloomin Brands and United Parks 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 United Parks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomin Brands and United Parks Resorts, you can compare the effects of market volatilities on Bloomin Brands and United Parks 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 United Parks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomin Brands and United Parks.
Diversification Opportunities for Bloomin Brands and United Parks
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bloomin and United is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bloomin Brands and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts 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 United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of Bloomin Brands i.e., Bloomin Brands and United Parks go up and down completely randomly.
Pair Corralation between Bloomin Brands and United Parks
Given the investment horizon of 90 days Bloomin Brands is expected to under-perform the United Parks. In addition to that, Bloomin Brands is 1.98 times more volatile than United Parks Resorts. It trades about -0.12 of its total potential returns per unit of risk. United Parks Resorts is currently generating about 0.12 per unit of volatility. If you would invest 5,490 in United Parks Resorts on August 30, 2024 and sell it today you would earn a total of 317.00 from holding United Parks Resorts or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomin Brands vs. United Parks Resorts
Performance |
| Timeline |
| Bloomin Brands |
| United Parks Resorts |
Bloomin Brands and United Parks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomin Brands and United Parks
The main advantage of trading using opposite Bloomin Brands and United Parks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomin Brands position performs unexpectedly, United Parks 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 United Parks will offset losses from the drop in United Parks' long position.| Bloomin Brands vs. Chipotle Mexican Grill | Bloomin Brands vs. Yum Brands | Bloomin Brands vs. The Wendys Co | Bloomin Brands vs. McDonalds |
| United Parks vs. Chipotle Mexican Grill | United Parks vs. Yum Brands | United Parks vs. The Wendys Co | United Parks vs. McDonalds |
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.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |