Correlation Between Bt Brands and Wingstop
Can any of the company-specific risk be diversified away by investing in both Bt Brands and Wingstop 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 Wingstop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bt Brands and Wingstop, you can compare the effects of market volatilities on Bt Brands and Wingstop 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 Wingstop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bt Brands and Wingstop.
Diversification Opportunities for Bt Brands and Wingstop
Significant diversification
The 3 months correlation between BTBD and Wingstop is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and Wingstop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wingstop 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 Wingstop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wingstop has no effect on the direction of Bt Brands i.e., Bt Brands and Wingstop go up and down completely randomly.
Pair Corralation between Bt Brands and Wingstop
Given the investment horizon of 90 days Bt Brands is expected to under-perform the Wingstop. In addition to that, Bt Brands is 1.74 times more volatile than Wingstop. It trades about 0.0 of its total potential returns per unit of risk. Wingstop is currently generating about 0.05 per unit of volatility. If you would invest 28,036 in Wingstop on August 28, 2024 and sell it today you would earn a total of 5,680 from holding Wingstop or generate 20.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bt Brands vs. Wingstop
Performance |
| Timeline |
| Bt Brands |
| Wingstop |
Bt Brands and Wingstop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bt Brands and Wingstop
The main advantage of trading using opposite Bt Brands and Wingstop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bt Brands position performs unexpectedly, Wingstop 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 Wingstop will offset losses from the drop in Wingstop'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 |
| Wingstop vs. Papa Johns International | Wingstop vs. Chipotle Mexican Grill | Wingstop vs. The Wendys Co | Wingstop vs. Dominos Pizza |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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