Correlation Between Bloomin Brands and One Group
Can any of the company-specific risk be diversified away by investing in both Bloomin Brands and One Group 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 One Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomin Brands and One Group Hospitality, you can compare the effects of market volatilities on Bloomin Brands and One Group 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 One Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomin Brands and One Group.
Diversification Opportunities for Bloomin Brands and One Group
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bloomin and One is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bloomin Brands and One Group Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Group Hospitality 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 One Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Group Hospitality has no effect on the direction of Bloomin Brands i.e., Bloomin Brands and One Group go up and down completely randomly.
Pair Corralation between Bloomin Brands and One Group
Given the investment horizon of 90 days Bloomin Brands is expected to under-perform the One Group. But the stock apears to be less risky and, when comparing its historical volatility, Bloomin Brands is 1.22 times less risky than One Group. The stock trades about -0.16 of its potential returns per unit of risk. The One Group Hospitality is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 352.00 in One Group Hospitality on August 28, 2024 and sell it today you would earn a total of 1.00 from holding One Group Hospitality or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomin Brands vs. One Group Hospitality
Performance |
| Timeline |
| Bloomin Brands |
| One Group Hospitality |
Bloomin Brands and One Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomin Brands and One Group
The main advantage of trading using opposite Bloomin Brands and One Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomin Brands position performs unexpectedly, One Group 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 One Group will offset losses from the drop in One Group's long position.| Bloomin Brands vs. Dine Brands Global | Bloomin Brands vs. BJs Restaurants | Bloomin Brands vs. The Cheesecake Factory | Bloomin Brands vs. Brinker International |
| One Group vs. FAT Brands | One Group vs. Potbelly Co | One Group vs. BJs Restaurants | One Group vs. Rave Restaurant Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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