Correlation Between Brinker International and Leatt Corp
Can any of the company-specific risk be diversified away by investing in both Brinker International and Leatt 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 Leatt 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 Leatt Corp, you can compare the effects of market volatilities on Brinker International and Leatt 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 Leatt Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Leatt Corp.
Diversification Opportunities for Brinker International and Leatt Corp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brinker and Leatt is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Leatt Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leatt 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 Leatt Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leatt Corp has no effect on the direction of Brinker International i.e., Brinker International and Leatt Corp go up and down completely randomly.
Pair Corralation between Brinker International and Leatt Corp
Considering the 90-day investment horizon Brinker International is expected to generate 0.87 times more return on investment than Leatt Corp. However, Brinker International is 1.15 times less risky than Leatt Corp. It trades about 0.15 of its potential returns per unit of risk. Leatt Corp is currently generating about -0.05 per unit of risk. If you would invest 3,449 in Brinker International on November 1, 2024 and sell it today you would earn a total of 14,801 from holding Brinker International or generate 429.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. Leatt Corp
Performance |
| Timeline |
| Brinker International |
| Leatt Corp |
Brinker International and Leatt Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Leatt Corp
The main advantage of trading using opposite Brinker International and Leatt Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Leatt 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 Leatt Corp will offset losses from the drop in Leatt 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 |
| Leatt Corp vs. Flanigans Enterprises | Leatt Corp vs. BJs Restaurants | Leatt Corp vs. Brinker International | Leatt Corp vs. Bloomin Brands |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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