Correlation Between Brinker International and Allegroeu
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
-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 Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.36% |
| Values | Daily Returns |
Brinker International vs. Allegroeu SA
Performance |
| Timeline |
| Brinker International |
| Allegroeu SA |
Brinker International and Allegroeu Volatility Contrast
Predicted Return Density |
| 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.| Brinker International vs. Dennys Corp | ||
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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