Correlation Between Brinker International and Gabelli Convertible
Can any of the company-specific risk be diversified away by investing in both Brinker International and Gabelli Convertible 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 Gabelli Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Gabelli Convertible And, you can compare the effects of market volatilities on Brinker International and Gabelli Convertible 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 Gabelli Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Gabelli Convertible.
Diversification Opportunities for Brinker International and Gabelli Convertible
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Brinker and Gabelli is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Gabelli Convertible And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Convertible And 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 Gabelli Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Convertible And has no effect on the direction of Brinker International i.e., Brinker International and Gabelli Convertible go up and down completely randomly.
Pair Corralation between Brinker International and Gabelli Convertible
Considering the 90-day investment horizon Brinker International is expected to generate 2.51 times more return on investment than Gabelli Convertible. However, Brinker International is 2.51 times more volatile than Gabelli Convertible And. It trades about 0.53 of its potential returns per unit of risk. Gabelli Convertible And is currently generating about 0.5 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. Gabelli Convertible And
Performance |
| Timeline |
| Brinker International |
| Gabelli Convertible And |
Brinker International and Gabelli Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Gabelli Convertible
The main advantage of trading using opposite Brinker International and Gabelli Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Gabelli Convertible 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 Gabelli Convertible will offset losses from the drop in Gabelli Convertible'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 |
| Gabelli Convertible vs. Gabelli Global Small | Gabelli Convertible vs. MFS Investment Grade | Gabelli Convertible vs. Eaton Vance National | Gabelli Convertible vs. GAMCO Natural Resources |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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