Correlation Between Brinker International and Allegroeu

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Can any of the company-specific risk be diversified away by investing in both Brinker International and Allegroeu 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 Brinker International and Allegroeu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Allegroeu SA, you can compare the effects of market volatilities on Brinker International and Allegroeu 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 Brinker International with a short position of Allegroeu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Allegroeu.

Diversification Opportunities for Brinker International and Allegroeu

BrinkerAllegroeuDiversified AwayBrinkerAllegroeuDiversified Away100%
-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Brinker and Allegroeu is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Allegroeu SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegroeu SA and Brinker International 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 Brinker International are associated (or correlated) with Allegroeu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegroeu SA has no effect on the direction of Brinker International i.e., Brinker International and Allegroeu go up and down completely randomly.

Pair Corralation between Brinker International and Allegroeu

Considering the 90-day investment horizon Brinker International is expected to generate 1.54 times more return on investment than Allegroeu. However, Brinker International is 1.54 times more volatile than Allegroeu SA. It trades about 0.13 of its potential returns per unit of risk. Allegroeu SA is currently generating about 0.03 per unit of risk. If you would invest  12,908  in Brinker International on December 3, 2024 and sell it today you would earn a total of  3,541  from holding Brinker International or generate 27.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.36%
ValuesDaily Returns

Brinker International  vs.  Allegroeu SA

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1001020304050
JavaScript chart by amCharts 3.21.15EAT ALEGF
       Timeline  
Brinker International 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Brinker International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Brinker International unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFebMar130140150160170180190
Allegroeu SA 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Allegroeu SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Allegroeu is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15JanFebFebMar6.76.86.977.17.27.37.47.57.6

Brinker International and Allegroeu Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.74-8.04-5.35-2.650.02.725.588.4311.2914.15 0.010.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15EAT ALEGF
       Returns  

Pair Trading with Brinker International and Allegroeu

The main advantage of trading using opposite Brinker International and Allegroeu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Allegroeu 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 Allegroeu will offset losses from the drop in Allegroeu's long position.
The idea behind Brinker International and Allegroeu SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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