Correlation Between CAVA Group, and Dine Brands
Can any of the company-specific risk be diversified away by investing in both CAVA Group, and Dine Brands 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 CAVA Group, and Dine Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAVA Group, and Dine Brands Global, you can compare the effects of market volatilities on CAVA Group, and Dine Brands 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 CAVA Group, with a short position of Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAVA Group, and Dine Brands.
Diversification Opportunities for CAVA Group, and Dine Brands
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CAVA and Dine is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CAVA Group, and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global and CAVA Group, 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 CAVA Group, are associated (or correlated) with Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of CAVA Group, i.e., CAVA Group, and Dine Brands go up and down completely randomly.
Pair Corralation between CAVA Group, and Dine Brands
Given the investment horizon of 90 days CAVA Group, is expected to generate 1.89 times more return on investment than Dine Brands. However, CAVA Group, is 1.89 times more volatile than Dine Brands Global. It trades about -0.17 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.46 per unit of risk. If you would invest 12,297 in CAVA Group, on November 27, 2024 and sell it today you would lose (1,875) from holding CAVA Group, or give up 15.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAVA Group, vs. Dine Brands Global
Performance |
| Timeline |
| CAVA Group, |
| Dine Brands Global |
CAVA Group, and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAVA Group, and Dine Brands
The main advantage of trading using opposite CAVA Group, and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAVA Group, position performs unexpectedly, Dine Brands 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 Dine Brands will offset losses from the drop in Dine Brands' long position.| CAVA Group, vs. AG Mortgage Investment | CAVA Group, vs. Universal Technical Institute | CAVA Group, vs. Western Asset Investment | CAVA Group, vs. Skillful Craftsman Education |
| Dine Brands vs. Bloomin Brands | Dine Brands vs. BJs Restaurants | Dine Brands vs. The Cheesecake Factory | Dine Brands vs. Brinker International |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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