Correlation Between Driven Brands and IQ 500
Can any of the company-specific risk be diversified away by investing in both Driven Brands and IQ 500 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 Driven Brands and IQ 500 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Driven Brands Holdings and IQ 500 International, you can compare the effects of market volatilities on Driven Brands and IQ 500 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 Driven Brands with a short position of IQ 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Driven Brands and IQ 500.
Diversification Opportunities for Driven Brands and IQ 500
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Driven and IQIN is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Driven Brands Holdings and IQ 500 International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ 500 International and Driven 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 Driven Brands Holdings are associated (or correlated) with IQ 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ 500 International has no effect on the direction of Driven Brands i.e., Driven Brands and IQ 500 go up and down completely randomly.
Pair Corralation between Driven Brands and IQ 500
Given the investment horizon of 90 days Driven Brands Holdings is expected to under-perform the IQ 500. In addition to that, Driven Brands is 3.63 times more volatile than IQ 500 International. It trades about -0.02 of its total potential returns per unit of risk. IQ 500 International is currently generating about 0.05 per unit of volatility. If you would invest 2,667 in IQ 500 International on August 30, 2024 and sell it today you would earn a total of 593.00 from holding IQ 500 International or generate 22.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Driven Brands Holdings vs. IQ 500 International
Performance |
| Timeline |
| Driven Brands Holdings |
| IQ 500 International |
Driven Brands and IQ 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Driven Brands and IQ 500
The main advantage of trading using opposite Driven Brands and IQ 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Driven Brands position performs unexpectedly, IQ 500 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 IQ 500 will offset losses from the drop in IQ 500's long position.| Driven Brands vs. CarGurus | Driven Brands vs. KAR Auction Services | Driven Brands vs. Kingsway Financial Services | Driven Brands vs. Group 1 Automotive |
| IQ 500 vs. IQ 50 Percent | IQ 500 vs. FlexShares International Quality | IQ 500 vs. Invesco SP International | IQ 500 vs. American Century Quality |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |