Correlation Between Cannae Holdings and Dennys Corp
Can any of the company-specific risk be diversified away by investing in both Cannae Holdings and Dennys Corp 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 Cannae Holdings and Dennys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannae Holdings and Dennys Corp, you can compare the effects of market volatilities on Cannae Holdings and Dennys Corp 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 Cannae Holdings with a short position of Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannae Holdings and Dennys Corp.
Diversification Opportunities for Cannae Holdings and Dennys Corp
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cannae and Dennys is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cannae Holdings and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp and Cannae Holdings 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 Cannae Holdings are associated (or correlated) with Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of Cannae Holdings i.e., Cannae Holdings and Dennys Corp go up and down completely randomly.
Pair Corralation between Cannae Holdings and Dennys Corp
Given the investment horizon of 90 days Cannae Holdings is expected to generate 0.48 times more return on investment than Dennys Corp. However, Cannae Holdings is 2.09 times less risky than Dennys Corp. It trades about 0.1 of its potential returns per unit of risk. Dennys Corp is currently generating about -0.01 per unit of risk. If you would invest 1,784 in Cannae Holdings on September 1, 2024 and sell it today you would earn a total of 386.00 from holding Cannae Holdings or generate 21.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cannae Holdings vs. Dennys Corp
Performance |
| Timeline |
| Cannae Holdings |
| Dennys Corp |
Cannae Holdings and Dennys Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannae Holdings and Dennys Corp
The main advantage of trading using opposite Cannae Holdings and Dennys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannae Holdings position performs unexpectedly, Dennys Corp 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 Dennys Corp will offset losses from the drop in Dennys Corp's long position.| Cannae Holdings vs. Brightsphere Investment Group | Cannae Holdings vs. Adtalem Global Education | Cannae Holdings vs. Hamilton Lane | Cannae Holdings vs. ConnectOne Bancorp |
| Dennys Corp vs. The Wendys Co | Dennys Corp vs. Shake Shack | Dennys Corp vs. Papa Johns International | Dennys Corp vs. Darden Restaurants |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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