Correlation Between Bt Brands and GEN Restaurant
Can any of the company-specific risk be diversified away by investing in both Bt Brands and GEN Restaurant 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 Bt Brands and GEN Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bt Brands and GEN Restaurant Group,, you can compare the effects of market volatilities on Bt Brands and GEN Restaurant 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 Bt Brands with a short position of GEN Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bt Brands and GEN Restaurant.
Diversification Opportunities for Bt Brands and GEN Restaurant
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BTBD and GEN is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, and Bt 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 Bt Brands are associated (or correlated) with GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of Bt Brands i.e., Bt Brands and GEN Restaurant go up and down completely randomly.
Pair Corralation between Bt Brands and GEN Restaurant
Given the investment horizon of 90 days Bt Brands is expected to generate 1.37 times more return on investment than GEN Restaurant. However, Bt Brands is 1.37 times more volatile than GEN Restaurant Group,. It trades about 0.02 of its potential returns per unit of risk. GEN Restaurant Group, is currently generating about -0.04 per unit of risk. If you would invest 210.00 in Bt Brands on November 19, 2024 and sell it today you would lose (31.50) from holding Bt Brands or give up 15.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 83.27% |
| Values | Daily Returns |
Bt Brands vs. GEN Restaurant Group,
Performance |
| Timeline |
| Bt Brands |
| GEN Restaurant Group, |
Bt Brands and GEN Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bt Brands and GEN Restaurant
The main advantage of trading using opposite Bt Brands and GEN Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bt Brands position performs unexpectedly, GEN Restaurant 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 GEN Restaurant will offset losses from the drop in GEN Restaurant's long position.| Bt Brands vs. Alsea SAB de | Bt Brands vs. Marstons PLC | Bt Brands vs. Bagger Daves Burger | Bt Brands vs. Marstons PLC |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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