Correlation Between Brinker International and Dennys Corp
Can any of the company-specific risk be diversified away by investing in both Brinker International and Dennys Corp 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 Dennys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Dennys Corp, you can compare the effects of market volatilities on Brinker International and Dennys Corp 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 Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Dennys Corp.
Diversification Opportunities for Brinker International and Dennys Corp
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brinker and Dennys is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp 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 Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of Brinker International i.e., Brinker International and Dennys Corp go up and down completely randomly.
Pair Corralation between Brinker International and Dennys Corp
Considering the 90-day investment horizon Brinker International is expected to generate 0.97 times more return on investment than Dennys Corp. However, Brinker International is 1.03 times less risky than Dennys Corp. It trades about 0.12 of its potential returns per unit of risk. Dennys Corp is currently generating about -0.03 per unit of risk. If you would invest 3,294 in Brinker International on August 27, 2024 and sell it today you would earn a total of 9,268 from holding Brinker International or generate 281.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. Dennys Corp
Performance |
| Timeline |
| Brinker International |
| Dennys Corp |
Brinker International and Dennys Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Dennys Corp
The main advantage of trading using opposite Brinker International and Dennys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Dennys Corp 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 Dennys Corp will offset losses from the drop in Dennys Corp'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 |
| Dennys Corp vs. Brinker International | Dennys Corp vs. Bloomin Brands | Dennys Corp vs. Jack In The | Dennys Corp vs. BJs Restaurants |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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