Correlation Between Brinker International and Equinor ASA
Can any of the company-specific risk be diversified away by investing in both Brinker International and Equinor ASA 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 Equinor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Equinor ASA ADR, you can compare the effects of market volatilities on Brinker International and Equinor ASA 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 Equinor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Equinor ASA.
Diversification Opportunities for Brinker International and Equinor ASA
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brinker and Equinor is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Equinor ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinor ASA ADR 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 Equinor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinor ASA ADR has no effect on the direction of Brinker International i.e., Brinker International and Equinor ASA go up and down completely randomly.
Pair Corralation between Brinker International and Equinor ASA
Considering the 90-day investment horizon Brinker International is expected to generate 1.28 times more return on investment than Equinor ASA. However, Brinker International is 1.28 times more volatile than Equinor ASA ADR. It trades about 0.49 of its potential returns per unit of risk. Equinor ASA ADR is currently generating about -0.01 per unit of risk. If you would invest 9,773 in Brinker International on August 29, 2024 and sell it today you would earn a total of 3,336 from holding Brinker International or generate 34.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. Equinor ASA ADR
Performance |
| Timeline |
| Brinker International |
| Equinor ASA ADR |
Brinker International and Equinor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Equinor ASA
The main advantage of trading using opposite Brinker International and Equinor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Equinor ASA 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 Equinor ASA will offset losses from the drop in Equinor ASA's long position.| Brinker International vs. Jack In The | Brinker International vs. Potbelly Co | Brinker International vs. BJs Restaurants | Brinker International vs. One Group Hospitality |
| Equinor ASA vs. Chevron Corp | Equinor ASA vs. Merck Company | Equinor ASA vs. Pharvaris BV | Equinor ASA vs. Brinker International |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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