Correlation Between Butler National and Meritage Hospitality
Can any of the company-specific risk be diversified away by investing in both Butler National and Meritage Hospitality 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 Butler National and Meritage Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Butler National Corp and Meritage Hospitality Group, you can compare the effects of market volatilities on Butler National and Meritage Hospitality 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 Butler National with a short position of Meritage Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Butler National and Meritage Hospitality.
Diversification Opportunities for Butler National and Meritage Hospitality
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Butler and Meritage is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Butler National Corp and Meritage Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meritage Hospitality and Butler National 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 Butler National Corp are associated (or correlated) with Meritage Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meritage Hospitality has no effect on the direction of Butler National i.e., Butler National and Meritage Hospitality go up and down completely randomly.
Pair Corralation between Butler National and Meritage Hospitality
If you would invest 130.00 in Butler National Corp on September 1, 2024 and sell it today you would earn a total of 38.00 from holding Butler National Corp or generate 29.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Butler National Corp vs. Meritage Hospitality Group
Performance |
| Timeline |
| Butler National Corp |
| Meritage Hospitality |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Butler National and Meritage Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Butler National and Meritage Hospitality
The main advantage of trading using opposite Butler National and Meritage Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Butler National position performs unexpectedly, Meritage Hospitality 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 Meritage Hospitality will offset losses from the drop in Meritage Hospitality's long position.| Butler National vs. Seychelle Environmtl | Butler National vs. Energy and Water | Butler National vs. One World Universe | Butler National vs. Vow ASA |
| Meritage Hospitality vs. Ieh Corp | Meritage Hospitality vs. Noble Romans | Meritage Hospitality vs. Flanigans Enterprises |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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