Correlation Between Bloomin Brands and Prom Resources
Can any of the company-specific risk be diversified away by investing in both Bloomin Brands and Prom Resources 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 Prom Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomin Brands and Prom Resources, you can compare the effects of market volatilities on Bloomin Brands and Prom Resources 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 Prom Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomin Brands and Prom Resources.
Diversification Opportunities for Bloomin Brands and Prom Resources
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bloomin and Prom is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bloomin Brands and Prom Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prom Resources 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 Prom Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prom Resources has no effect on the direction of Bloomin Brands i.e., Bloomin Brands and Prom Resources go up and down completely randomly.
Pair Corralation between Bloomin Brands and Prom Resources
If you would invest 0.01 in Prom Resources on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Prom Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Bloomin Brands vs. Prom Resources
Performance |
| Timeline |
| Bloomin Brands |
| Prom Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bloomin Brands and Prom Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomin Brands and Prom Resources
The main advantage of trading using opposite Bloomin Brands and Prom Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomin Brands position performs unexpectedly, Prom Resources 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 Prom Resources will offset losses from the drop in Prom Resources' long position.| Bloomin Brands vs. Dine Brands Global | Bloomin Brands vs. BJs Restaurants | Bloomin Brands vs. The Cheesecake Factory | Bloomin Brands vs. Brinker International |
| Prom Resources vs. Grillit | Prom Resources vs. ZA Group | Prom Resources vs. Blue Water Global | Prom Resources vs. BJs Restaurants |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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