Correlation Between Brinker International and Kronos Worldwide
Can any of the company-specific risk be diversified away by investing in both Brinker International and Kronos Worldwide 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 Kronos Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Kronos Worldwide, you can compare the effects of market volatilities on Brinker International and Kronos Worldwide 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 Kronos Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Kronos Worldwide.
Diversification Opportunities for Brinker International and Kronos Worldwide
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brinker and Kronos is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Kronos Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Worldwide 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 Kronos Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Worldwide has no effect on the direction of Brinker International i.e., Brinker International and Kronos Worldwide go up and down completely randomly.
Pair Corralation between Brinker International and Kronos Worldwide
Considering the 90-day investment horizon Brinker International is expected to generate 1.32 times more return on investment than Kronos Worldwide. However, Brinker International is 1.32 times more volatile than Kronos Worldwide. It trades about 0.19 of its potential returns per unit of risk. Kronos Worldwide is currently generating about -0.24 per unit of risk. If you would invest 11,900 in Brinker International on September 13, 2024 and sell it today you would earn a total of 1,074 from holding Brinker International or generate 9.03% 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. Kronos Worldwide
Performance |
| Timeline |
| Brinker International |
| Kronos Worldwide |
Brinker International and Kronos Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Kronos Worldwide
The main advantage of trading using opposite Brinker International and Kronos Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Kronos Worldwide 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 Kronos Worldwide will offset losses from the drop in Kronos Worldwide's long position.| Brinker International vs. Good Times Restaurants | Brinker International vs. Auburn National Bancorporation |
| Kronos Worldwide vs. Perimeter Solutions SA | Kronos Worldwide vs. Sensient Technologies | Kronos Worldwide vs. Element Solutions | Kronos Worldwide vs. Quaker Chemical |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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