Correlation Between Dine Brands and Noble Romans
Can any of the company-specific risk be diversified away by investing in both Dine Brands and Noble Romans 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 Noble Romans 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 Noble Romans, you can compare the effects of market volatilities on Dine Brands and Noble Romans 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 Noble Romans. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and Noble Romans.
Diversification Opportunities for Dine Brands and Noble Romans
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dine and Noble is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and Noble Romans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Romans 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 Noble Romans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Romans has no effect on the direction of Dine Brands i.e., Dine Brands and Noble Romans go up and down completely randomly.
Pair Corralation between Dine Brands and Noble Romans
Considering the 90-day investment horizon Dine Brands Global is expected to under-perform the Noble Romans. But the stock apears to be less risky and, when comparing its historical volatility, Dine Brands Global is 2.08 times less risky than Noble Romans. The stock trades about -0.04 of its potential returns per unit of risk. The Noble Romans is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Noble Romans on September 12, 2024 and sell it today you would lose (2.00) from holding Noble Romans or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dine Brands Global vs. Noble Romans
Performance |
| Timeline |
| Dine Brands Global |
| Noble Romans |
Dine Brands and Noble Romans Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dine Brands and Noble Romans
The main advantage of trading using opposite Dine Brands and Noble Romans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dine Brands position performs unexpectedly, Noble Romans 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 Noble Romans will offset losses from the drop in Noble Romans' long position.| Dine Brands vs. Noble Romans | Dine Brands vs. Good Times Restaurants | Dine Brands vs. Flanigans Enterprises | Dine Brands vs. FAT Brands |
| Noble Romans vs. Arhaus Inc | Noble Romans vs. Floor Decor Holdings | Noble Romans vs. Live Ventures | Noble Romans vs. ATT Inc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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