Correlation Between Brinker International and Collegium Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Brinker International and Collegium Pharmaceutical 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 Collegium Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Collegium Pharmaceutical, you can compare the effects of market volatilities on Brinker International and Collegium Pharmaceutical 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 Collegium Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Collegium Pharmaceutical.
Diversification Opportunities for Brinker International and Collegium Pharmaceutical
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brinker and Collegium is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Collegium Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collegium Pharmaceutical 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 Collegium Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collegium Pharmaceutical has no effect on the direction of Brinker International i.e., Brinker International and Collegium Pharmaceutical go up and down completely randomly.
Pair Corralation between Brinker International and Collegium Pharmaceutical
Considering the 90-day investment horizon Brinker International is expected to generate 0.95 times more return on investment than Collegium Pharmaceutical. However, Brinker International is 1.06 times less risky than Collegium Pharmaceutical. It trades about 0.53 of its potential returns per unit of risk. Collegium Pharmaceutical is currently generating about -0.21 per unit of risk. If you would invest 10,271 in Brinker International on September 1, 2024 and sell it today you would earn a total of 2,956 from holding Brinker International or generate 28.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. Collegium Pharmaceutical
Performance |
| Timeline |
| Brinker International |
| Collegium Pharmaceutical |
Brinker International and Collegium Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Collegium Pharmaceutical
The main advantage of trading using opposite Brinker International and Collegium Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Collegium Pharmaceutical 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 Collegium Pharmaceutical will offset losses from the drop in Collegium Pharmaceutical's long position.| Brinker International vs. Dennys Corp | Brinker International vs. Bloomin Brands | Brinker International vs. Jack In The | Brinker International vs. Dine Brands Global |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |