Correlation Between Dennys Corp and FEDEX
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By analyzing existing cross correlation between Dennys Corp and FEDEX P 405, you can compare the effects of market volatilities on Dennys Corp and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dennys Corp and FEDEX.
Diversification Opportunities for Dennys Corp and FEDEX
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dennys and FEDEX is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and FEDEX P 405 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 405 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 405 has no effect on the direction of Dennys Corp i.e., Dennys Corp and FEDEX go up and down completely randomly.
Pair Corralation between Dennys Corp and FEDEX
Given the investment horizon of 90 days Dennys Corp is expected to under-perform the FEDEX. But the stock apears to be less risky and, when comparing its historical volatility, Dennys Corp is 18.01 times less risky than FEDEX. The stock trades about -0.02 of its potential returns per unit of risk. The FEDEX P 405 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,127 in FEDEX P 405 on September 3, 2024 and sell it today you would earn a total of 172.00 from holding FEDEX P 405 or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.34% |
| Values | Daily Returns |
Dennys Corp vs. FEDEX P 405
Performance |
| Timeline |
| Dennys Corp |
| FEDEX P 405 |
Dennys Corp and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dennys Corp and FEDEX
The main advantage of trading using opposite Dennys Corp and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dennys Corp position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX's long position.| Dennys Corp vs. Brinker International | Dennys Corp vs. Bloomin Brands | Dennys Corp vs. Jack In The | Dennys Corp vs. BJs 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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