Correlation Between Brinker International and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both Brinker International and Minerals Technologies 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 Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Minerals Technologies, you can compare the effects of market volatilities on Brinker International and Minerals Technologies 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 Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Minerals Technologies.
Diversification Opportunities for Brinker International and Minerals Technologies
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brinker and Minerals is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies 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 Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of Brinker International i.e., Brinker International and Minerals Technologies go up and down completely randomly.
Pair Corralation between Brinker International and Minerals Technologies
Considering the 90-day investment horizon Brinker International is expected to generate 1.46 times more return on investment than Minerals Technologies. However, Brinker International is 1.46 times more volatile than Minerals Technologies. It trades about 0.15 of its potential returns per unit of risk. Minerals Technologies is currently generating about 0.07 per unit of risk. If you would invest 3,940 in Brinker International on September 12, 2024 and sell it today you would earn a total of 8,756 from holding Brinker International or generate 222.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. Minerals Technologies
Performance |
| Timeline |
| Brinker International |
| Minerals Technologies |
Brinker International and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Minerals Technologies
The main advantage of trading using opposite Brinker International and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| Brinker International vs. Noble Romans | Brinker International vs. Good Times Restaurants | Brinker International vs. Flanigans Enterprises | Brinker International vs. FAT Brands |
| Minerals Technologies vs. Griffon | Minerals Technologies vs. Merck Company | Minerals Technologies vs. Brinker International | Minerals Technologies vs. Alcoa Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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