Correlation Between Dine Brands and Hawkins
Can any of the company-specific risk be diversified away by investing in both Dine Brands and Hawkins 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 Hawkins 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 Hawkins, you can compare the effects of market volatilities on Dine Brands and Hawkins 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 Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and Hawkins.
Diversification Opportunities for Dine Brands and Hawkins
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dine and Hawkins is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Dine Brands i.e., Dine Brands and Hawkins go up and down completely randomly.
Pair Corralation between Dine Brands and Hawkins
Considering the 90-day investment horizon Dine Brands Global is expected to under-perform the Hawkins. In addition to that, Dine Brands is 1.02 times more volatile than Hawkins. It trades about -0.21 of its total potential returns per unit of risk. Hawkins is currently generating about -0.07 per unit of volatility. If you would invest 12,418 in Hawkins on September 19, 2024 and sell it today you would lose (592.00) from holding Hawkins or give up 4.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dine Brands Global vs. Hawkins
Performance |
| Timeline |
| Dine Brands Global |
| Hawkins |
Dine Brands and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dine Brands and Hawkins
The main advantage of trading using opposite Dine Brands and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dine Brands position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.| Dine Brands vs. Bloomin Brands | Dine Brands vs. BJs Restaurants | Dine Brands vs. The Cheesecake Factory | Dine Brands vs. Brinker International |
| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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