Correlation Between Dennys Corp and Fomento Economico
Can any of the company-specific risk be diversified away by investing in both Dennys Corp and Fomento Economico 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 Fomento Economico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dennys Corp and Fomento Economico Mexicano, you can compare the effects of market volatilities on Dennys Corp and Fomento Economico 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 Fomento Economico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dennys Corp and Fomento Economico.
Diversification Opportunities for Dennys Corp and Fomento Economico
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dennys and Fomento is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and Fomento Economico Mexicano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento Economico 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 Fomento Economico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento Economico has no effect on the direction of Dennys Corp i.e., Dennys Corp and Fomento Economico go up and down completely randomly.
Pair Corralation between Dennys Corp and Fomento Economico
Given the investment horizon of 90 days Dennys Corp is expected to generate 2.1 times more return on investment than Fomento Economico. However, Dennys Corp is 2.1 times more volatile than Fomento Economico Mexicano. It trades about 0.03 of its potential returns per unit of risk. Fomento Economico Mexicano is currently generating about -0.23 per unit of risk. If you would invest 651.00 in Dennys Corp on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Dennys Corp or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dennys Corp vs. Fomento Economico Mexicano
Performance |
| Timeline |
| Dennys Corp |
| Fomento Economico |
Dennys Corp and Fomento Economico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dennys Corp and Fomento Economico
The main advantage of trading using opposite Dennys Corp and Fomento Economico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dennys Corp position performs unexpectedly, Fomento Economico 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 Fomento Economico will offset losses from the drop in Fomento Economico's long position.| Dennys Corp vs. Brinker International | Dennys Corp vs. Bloomin Brands | Dennys Corp vs. Jack In The | Dennys Corp vs. BJs Restaurants |
| Fomento Economico vs. Ambev SA ADR | Fomento Economico vs. Boston Beer | Fomento Economico vs. Carlsberg AS | Fomento Economico vs. Molson Coors Brewing |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| CEOs Directory Screen CEOs from public companies around the world |