Correlation Between Dennys Corp and Chuys Holdings
Can any of the company-specific risk be diversified away by investing in both Dennys Corp and Chuys 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 Dennys Corp and Chuys Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dennys Corp and Chuys Holdings, you can compare the effects of market volatilities on Dennys Corp and Chuys 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 Dennys Corp with a short position of Chuys Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dennys Corp and Chuys Holdings.
Diversification Opportunities for Dennys Corp and Chuys Holdings
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dennys and Chuys is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and Chuys Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuys Holdings and Dennys Corp 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 Dennys Corp are associated (or correlated) with Chuys Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuys Holdings has no effect on the direction of Dennys Corp i.e., Dennys Corp and Chuys Holdings go up and down completely randomly.
Pair Corralation between Dennys Corp and Chuys Holdings
Given the investment horizon of 90 days Dennys Corp is expected to under-perform the Chuys Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Dennys Corp is 1.11 times less risky than Chuys Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Chuys Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,033 in Chuys Holdings on August 24, 2024 and sell it today you would earn a total of 715.00 from holding Chuys Holdings or generate 23.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.95% |
| Values | Daily Returns |
Dennys Corp vs. Chuys Holdings
Performance |
| Timeline |
| Dennys Corp |
| Chuys Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Dennys Corp and Chuys Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dennys Corp and Chuys Holdings
The main advantage of trading using opposite Dennys Corp and Chuys Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dennys Corp position performs unexpectedly, Chuys 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 Chuys Holdings will offset losses from the drop in Chuys Holdings' long position.| Dennys Corp vs. Brinker International | Dennys Corp vs. Bloomin Brands | Dennys Corp vs. Jack In The | Dennys Corp vs. BJs Restaurants |
| Chuys Holdings vs. Brinker International | Chuys Holdings vs. Bloomin Brands | Chuys Holdings vs. FAT Brands | Chuys Holdings vs. Potbelly Co |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |