Correlation Between Dine Brands and Alsea SAB
Can any of the company-specific risk be diversified away by investing in both Dine Brands and Alsea SAB 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 Alsea SAB 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 Alsea SAB de, you can compare the effects of market volatilities on Dine Brands and Alsea SAB 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 Alsea SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and Alsea SAB.
Diversification Opportunities for Dine Brands and Alsea SAB
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dine and Alsea is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and Alsea SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alsea SAB de 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 Alsea SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alsea SAB de has no effect on the direction of Dine Brands i.e., Dine Brands and Alsea SAB go up and down completely randomly.
Pair Corralation between Dine Brands and Alsea SAB
Considering the 90-day investment horizon Dine Brands Global is expected to under-perform the Alsea SAB. In addition to that, Dine Brands is 1.06 times more volatile than Alsea SAB de. It trades about -0.37 of its total potential returns per unit of risk. Alsea SAB de is currently generating about -0.04 per unit of volatility. If you would invest 210.00 in Alsea SAB de on January 8, 2025 and sell it today you would lose (8.00) from holding Alsea SAB de or give up 3.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dine Brands Global vs. Alsea SAB de
Performance |
| Timeline |
| Dine Brands Global |
| Alsea SAB de |
Dine Brands and Alsea SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dine Brands and Alsea SAB
The main advantage of trading using opposite Dine Brands and Alsea SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dine Brands position performs unexpectedly, Alsea SAB 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 Alsea SAB will offset losses from the drop in Alsea SAB's long position.| Dine Brands vs. Bloomin Brands | Dine Brands vs. BJs Restaurants | Dine Brands vs. The Cheesecake Factory | Dine Brands vs. Brinker International |
| Alsea SAB vs. Marstons PLC | Alsea SAB vs. Bagger Daves Burger | Alsea SAB vs. Flanigans Enterprises | Alsea SAB vs. Ark Restaurants Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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