Correlation Between Capital Clean and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Capital Clean and Biglari 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 Capital Clean and Biglari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Clean Energy and Biglari Holdings, you can compare the effects of market volatilities on Capital Clean and Biglari 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 Capital Clean with a short position of Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and Biglari Holdings.
Diversification Opportunities for Capital Clean and Biglari Holdings
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and Biglari is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and Capital Clean 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 Capital Clean Energy are associated (or correlated) with Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Capital Clean i.e., Capital Clean and Biglari Holdings go up and down completely randomly.
Pair Corralation between Capital Clean and Biglari Holdings
Given the investment horizon of 90 days Capital Clean Energy is expected to under-perform the Biglari Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Capital Clean Energy is 1.82 times less risky than Biglari Holdings. The stock trades about -0.01 of its potential returns per unit of risk. The Biglari Holdings is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 17,453 in Biglari Holdings on September 12, 2024 and sell it today you would earn a total of 5,407 from holding Biglari Holdings or generate 30.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Clean Energy vs. Biglari Holdings
Performance |
| Timeline |
| Capital Clean Energy |
| Biglari Holdings |
Capital Clean and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Clean and Biglari Holdings
The main advantage of trading using opposite Capital Clean and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Clean position performs unexpectedly, Biglari 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.| Capital Clean vs. Omni Health | Capital Clean vs. Everspin Technologies | Capital Clean vs. Amkor Technology | Capital Clean vs. Vishay Intertechnology |
| Biglari Holdings vs. Noble Romans | Biglari Holdings vs. Good Times Restaurants | Biglari Holdings vs. Flanigans Enterprises | Biglari Holdings vs. FAT Brands |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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