Correlation Between Dine Brands and Altria
Can any of the company-specific risk be diversified away by investing in both Dine Brands and Altria 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 Altria 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 Altria Group, you can compare the effects of market volatilities on Dine Brands and Altria 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 Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and Altria.
Diversification Opportunities for Dine Brands and Altria
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dine and Altria is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria 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 Altria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altria Group has no effect on the direction of Dine Brands i.e., Dine Brands and Altria go up and down completely randomly.
Pair Corralation between Dine Brands and Altria
Considering the 90-day investment horizon Dine Brands Global is expected to generate 5.69 times more return on investment than Altria. However, Dine Brands is 5.69 times more volatile than Altria Group. It trades about 0.18 of its potential returns per unit of risk. Altria Group is currently generating about 0.37 per unit of risk. If you would invest 2,985 in Dine Brands Global on September 4, 2024 and sell it today you would earn a total of 473.00 from holding Dine Brands Global or generate 15.85% 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. Altria Group
Performance |
| Timeline |
| Dine Brands Global |
| Altria Group |
Dine Brands and Altria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dine Brands and Altria
The main advantage of trading using opposite Dine Brands and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dine Brands position performs unexpectedly, Altria 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 Altria will offset losses from the drop in Altria's long position.| Dine Brands vs. Bloomin Brands | Dine Brands vs. BJs Restaurants | Dine Brands vs. The Cheesecake Factory | Dine Brands vs. Brinker International |
| Altria vs. British American Tobacco | Altria vs. Universal | Altria vs. Imperial Brands PLC | Altria vs. Philip Morris International |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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