Correlation Between Brinker International and Altice USA
Can any of the company-specific risk be diversified away by investing in both Brinker International and Altice USA 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 Altice USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Altice USA, you can compare the effects of market volatilities on Brinker International and Altice USA 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 Altice USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Altice USA.
Diversification Opportunities for Brinker International and Altice USA
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brinker and Altice is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Altice USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altice USA 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 Altice USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altice USA has no effect on the direction of Brinker International i.e., Brinker International and Altice USA go up and down completely randomly.
Pair Corralation between Brinker International and Altice USA
Considering the 90-day investment horizon Brinker International is expected to generate 0.48 times more return on investment than Altice USA. However, Brinker International is 2.1 times less risky than Altice USA. It trades about 0.12 of its potential returns per unit of risk. Altice USA is currently generating about 0.01 per unit of risk. If you would invest 3,591 in Brinker International on August 29, 2024 and sell it today you would earn a total of 9,478 from holding Brinker International or generate 263.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. Altice USA
Performance |
| Timeline |
| Brinker International |
| Altice USA |
Brinker International and Altice USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Altice USA
The main advantage of trading using opposite Brinker International and Altice USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Altice USA 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 Altice USA will offset losses from the drop in Altice USA's long position.| Brinker International vs. Jack In The | Brinker International vs. Potbelly Co | Brinker International vs. Rave Restaurant Group |
| Altice USA vs. Merck Company | Altice USA vs. Pharvaris BV | Altice USA vs. Brinker International | Altice USA vs. Alcoa Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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