Correlation Between Brinker International and Bald Eagle
Can any of the company-specific risk be diversified away by investing in both Brinker International and Bald Eagle 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 Bald Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Bald Eagle Gold, you can compare the effects of market volatilities on Brinker International and Bald Eagle 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 Bald Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Bald Eagle.
Diversification Opportunities for Brinker International and Bald Eagle
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brinker and Bald is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Bald Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bald Eagle Gold 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 Bald Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bald Eagle Gold has no effect on the direction of Brinker International i.e., Brinker International and Bald Eagle go up and down completely randomly.
Pair Corralation between Brinker International and Bald Eagle
Considering the 90-day investment horizon Brinker International is expected to generate 0.63 times more return on investment than Bald Eagle. However, Brinker International is 1.59 times less risky than Bald Eagle. It trades about 0.52 of its potential returns per unit of risk. Bald Eagle Gold is currently generating about 0.08 per unit of risk. If you would invest 9,701 in Brinker International on August 30, 2024 and sell it today you would earn a total of 3,368 from holding Brinker International or generate 34.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. Bald Eagle Gold
Performance |
| Timeline |
| Brinker International |
| Bald Eagle Gold |
Brinker International and Bald Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Bald Eagle
The main advantage of trading using opposite Brinker International and Bald Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Bald Eagle 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 Bald Eagle will offset losses from the drop in Bald Eagle's long position.| Brinker International vs. Jack In The | Brinker International vs. Potbelly Co | Brinker International vs. Rave Restaurant Group |
| Bald Eagle vs. Merck Company | Bald Eagle vs. Pharvaris BV | Bald Eagle vs. Brinker International | Bald Eagle 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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