Correlation Between Brinker International and China Shenhua
Can any of the company-specific risk be diversified away by investing in both Brinker International and China Shenhua 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 China Shenhua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and China Shenhua Energy, you can compare the effects of market volatilities on Brinker International and China Shenhua 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 China Shenhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and China Shenhua.
Diversification Opportunities for Brinker International and China Shenhua
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Brinker and China is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and China Shenhua Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Shenhua Energy 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 China Shenhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Shenhua Energy has no effect on the direction of Brinker International i.e., Brinker International and China Shenhua go up and down completely randomly.
Pair Corralation between Brinker International and China Shenhua
If you would invest 13,952 in Brinker International on November 9, 2024 and sell it today you would earn a total of 4,276 from holding Brinker International or generate 30.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. China Shenhua Energy
Performance |
| Timeline |
| Brinker International |
| China Shenhua Energy |
Brinker International and China Shenhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and China Shenhua
The main advantage of trading using opposite Brinker International and China Shenhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, China Shenhua 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 China Shenhua will offset losses from the drop in China Shenhua's long position.| Brinker International vs. Biglari Holdings | Brinker International vs. Sweetgreen | Brinker International vs. Nathans Famous | Brinker International vs. Noodles Company |
| China Shenhua vs. Bukit Asam Tbk | China Shenhua vs. Indo Tambangraya Megah | China Shenhua vs. Thungela Resources Limited |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |