Correlation Between Dine Brands and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both Dine Brands and Tianjin Capital 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 Tianjin Capital 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 Tianjin Capital Environmental, you can compare the effects of market volatilities on Dine Brands and Tianjin Capital 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 Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and Tianjin Capital.
Diversification Opportunities for Dine Brands and Tianjin Capital
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dine and Tianjin is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi 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 Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of Dine Brands i.e., Dine Brands and Tianjin Capital go up and down completely randomly.
Pair Corralation between Dine Brands and Tianjin Capital
Considering the 90-day investment horizon Dine Brands Global is expected to generate 2.27 times more return on investment than Tianjin Capital. However, Dine Brands is 2.27 times more volatile than Tianjin Capital Environmental. It trades about 0.09 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.15 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 | 97.67% |
| Values | Daily Returns |
Dine Brands Global vs. Tianjin Capital Environmental
Performance |
| Timeline |
| Dine Brands Global |
| Tianjin Capital Envi |
Dine Brands and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dine Brands and Tianjin Capital
The main advantage of trading using opposite Dine Brands and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dine Brands position performs unexpectedly, Tianjin Capital 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 Tianjin Capital will offset losses from the drop in Tianjin Capital'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 |
| Tianjin Capital vs. JJill Inc | Tianjin Capital vs. Duluth Holdings | Tianjin Capital vs. Under Armour C | Tianjin Capital vs. Nike 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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