Correlation Between Dutch Bros and Pinstripes Holdings
Can any of the company-specific risk be diversified away by investing in both Dutch Bros 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 Dutch Bros and Pinstripes Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dutch Bros and Pinstripes Holdings, you can compare the effects of market volatilities on Dutch Bros 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 Dutch Bros with a short position of Pinstripes Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dutch Bros and Pinstripes Holdings.
Diversification Opportunities for Dutch Bros and Pinstripes Holdings
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dutch and Pinstripes is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dutch Bros and Pinstripes Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinstripes Holdings and Dutch Bros 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 Dutch Bros 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 Dutch Bros i.e., Dutch Bros and Pinstripes Holdings go up and down completely randomly.
Pair Corralation between Dutch Bros and Pinstripes Holdings
Given the investment horizon of 90 days Dutch Bros is expected to generate 0.5 times more return on investment than Pinstripes Holdings. However, Dutch Bros is 2.01 times less risky than Pinstripes Holdings. It trades about 0.11 of its potential returns per unit of risk. Pinstripes Holdings is currently generating about -0.14 per unit of risk. If you would invest 3,836 in Dutch Bros on October 26, 2024 and sell it today you would earn a total of 2,255 from holding Dutch Bros or generate 58.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dutch Bros vs. Pinstripes Holdings
Performance |
| Timeline |
| Dutch Bros |
| Pinstripes Holdings |
Dutch Bros and Pinstripes Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dutch Bros and Pinstripes Holdings
The main advantage of trading using opposite Dutch Bros and Pinstripes Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dutch Bros 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.| Dutch Bros vs. Starbucks | Dutch Bros vs. CAVA Group, | Dutch Bros vs. Yum China Holdings | Dutch Bros vs. Wingstop |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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