Correlation Between Dennys Corp and Red Robin
Can any of the company-specific risk be diversified away by investing in both Dennys Corp and Red Robin 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 Red Robin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dennys Corp and Red Robin Gourmet, you can compare the effects of market volatilities on Dennys Corp and Red Robin 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 Red Robin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dennys Corp and Red Robin.
Diversification Opportunities for Dennys Corp and Red Robin
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dennys and Red is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and Red Robin Gourmet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Robin Gourmet 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 Red Robin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Robin Gourmet has no effect on the direction of Dennys Corp i.e., Dennys Corp and Red Robin go up and down completely randomly.
Pair Corralation between Dennys Corp and Red Robin
Given the investment horizon of 90 days Dennys Corp is expected to generate 2.37 times more return on investment than Red Robin. However, Dennys Corp is 2.37 times more volatile than Red Robin Gourmet. It trades about -0.14 of its potential returns per unit of risk. Red Robin Gourmet is currently generating about -0.57 per unit of risk. If you would invest 670.00 in Dennys Corp on November 28, 2024 and sell it today you would lose (149.00) from holding Dennys Corp or give up 22.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dennys Corp vs. Red Robin Gourmet
Performance |
| Timeline |
| Dennys Corp |
| Red Robin Gourmet |
Dennys Corp and Red Robin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dennys Corp and Red Robin
The main advantage of trading using opposite Dennys Corp and Red Robin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dennys Corp position performs unexpectedly, Red Robin 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 Red Robin will offset losses from the drop in Red Robin's long position.| Dennys Corp vs. Brinker International | Dennys Corp vs. Bloomin Brands | Dennys Corp vs. Jack In The | Dennys Corp vs. BJs Restaurants |
| Red Robin vs. Dine Brands Global | Red Robin vs. Bloomin Brands | Red Robin vs. BJs Restaurants | Red Robin vs. The Cheesecake Factory |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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