Correlation Between Dine Brands and Above Food
Can any of the company-specific risk be diversified away by investing in both Dine Brands and Above Food 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 Dine Brands and Above Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dine Brands Global and Above Food Ingredients, you can compare the effects of market volatilities on Dine Brands and Above Food 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 Dine Brands with a short position of Above Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and Above Food.
Diversification Opportunities for Dine Brands and Above Food
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dine and Above is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and Above Food Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Above Food Ingredients and Dine Brands 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 Dine Brands Global are associated (or correlated) with Above Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Above Food Ingredients has no effect on the direction of Dine Brands i.e., Dine Brands and Above Food go up and down completely randomly.
Pair Corralation between Dine Brands and Above Food
Considering the 90-day investment horizon Dine Brands Global is expected to generate 0.34 times more return on investment than Above Food. However, Dine Brands Global is 2.95 times less risky than Above Food. It trades about -0.07 of its potential returns per unit of risk. Above Food Ingredients is currently generating about -0.06 per unit of risk. If you would invest 6,986 in Dine Brands Global on October 23, 2024 and sell it today you would lose (4,322) from holding Dine Brands Global or give up 61.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.92% |
| Values | Daily Returns |
Dine Brands Global vs. Above Food Ingredients
Performance |
| Timeline |
| Dine Brands Global |
| Above Food Ingredients |
Dine Brands and Above Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dine Brands and Above Food
The main advantage of trading using opposite Dine Brands and Above Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dine Brands position performs unexpectedly, Above Food 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 Above Food will offset losses from the drop in Above Food's long position.| Dine Brands vs. Chipotle Mexican Grill | Dine Brands vs. Yum Brands | Dine Brands vs. The Wendys Co | Dine Brands vs. McDonalds |
| Above Food vs. Kingdee International Software | Above Food vs. Where Food Comes | Above Food vs. Q2 Holdings | Above Food vs. ServiceNow |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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