Correlation Between Dennys Corp and Saratoga Investment
Can any of the company-specific risk be diversified away by investing in both Dennys Corp and Saratoga Investment 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 Saratoga Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dennys Corp and Saratoga Investment Corp, you can compare the effects of market volatilities on Dennys Corp and Saratoga Investment 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 Saratoga Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dennys Corp and Saratoga Investment.
Diversification Opportunities for Dennys Corp and Saratoga Investment
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dennys and Saratoga is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and Saratoga Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saratoga Investment Corp 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 Saratoga Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saratoga Investment Corp has no effect on the direction of Dennys Corp i.e., Dennys Corp and Saratoga Investment go up and down completely randomly.
Pair Corralation between Dennys Corp and Saratoga Investment
Given the investment horizon of 90 days Dennys Corp is expected to under-perform the Saratoga Investment. In addition to that, Dennys Corp is 16.04 times more volatile than Saratoga Investment Corp. It trades about -0.01 of its total potential returns per unit of risk. Saratoga Investment Corp is currently generating about 0.18 per unit of volatility. If you would invest 2,419 in Saratoga Investment Corp on September 2, 2024 and sell it today you would earn a total of 127.00 from holding Saratoga Investment Corp or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dennys Corp vs. Saratoga Investment Corp
Performance |
| Timeline |
| Dennys Corp |
| Saratoga Investment Corp |
Dennys Corp and Saratoga Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dennys Corp and Saratoga Investment
The main advantage of trading using opposite Dennys Corp and Saratoga Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dennys Corp position performs unexpectedly, Saratoga Investment 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 Saratoga Investment will offset losses from the drop in Saratoga Investment's long position.| Dennys Corp vs. Brinker International | Dennys Corp vs. Bloomin Brands | Dennys Corp vs. Jack In The | Dennys Corp vs. BJs Restaurants |
| Saratoga Investment vs. Diamond Hill Investment | Saratoga Investment vs. AllianceBernstein Holding LP | Saratoga Investment vs. Associated Capital Group | Saratoga Investment vs. Blackstone Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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