Correlation Between Dine Brands and CAVA Group,
Can any of the company-specific risk be diversified away by investing in both Dine Brands and CAVA Group, 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 CAVA Group, 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 CAVA Group,, you can compare the effects of market volatilities on Dine Brands and CAVA Group, 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 CAVA Group,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and CAVA Group,.
Diversification Opportunities for Dine Brands and CAVA Group,
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dine and CAVA is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and CAVA Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAVA Group, 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 CAVA Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAVA Group, has no effect on the direction of Dine Brands i.e., Dine Brands and CAVA Group, go up and down completely randomly.
Pair Corralation between Dine Brands and CAVA Group,
Considering the 90-day investment horizon Dine Brands Global is expected to generate 1.96 times more return on investment than CAVA Group,. However, Dine Brands is 1.96 times more volatile than CAVA Group,. It trades about 0.09 of its potential returns per unit of risk. CAVA Group, is currently generating about 0.16 per unit of risk. If you would invest 3,123 in Dine Brands Global on August 29, 2024 and sell it today you would earn a total of 413.50 from holding Dine Brands Global or generate 13.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dine Brands Global vs. CAVA Group,
Performance |
| Timeline |
| Dine Brands Global |
| CAVA Group, |
Dine Brands and CAVA Group, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dine Brands and CAVA Group,
The main advantage of trading using opposite Dine Brands and CAVA Group, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dine Brands position performs unexpectedly, CAVA Group, 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 CAVA Group, will offset losses from the drop in CAVA Group,'s long position.| Dine Brands vs. Jack In The | Dine Brands vs. Potbelly Co | Dine Brands vs. BJs Restaurants | Dine Brands vs. Rave Restaurant Group |
| CAVA Group, vs. Jack In The | CAVA Group, vs. Potbelly Co | CAVA Group, vs. BJs Restaurants | CAVA Group, vs. Rave Restaurant 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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