Correlation Between Brinker International and Exxon
Can any of the company-specific risk be diversified away by investing in both Brinker International and Exxon 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 Exxon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Exxon Mobil Corp, you can compare the effects of market volatilities on Brinker International and Exxon 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 Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Exxon.
Diversification Opportunities for Brinker International and Exxon
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brinker and Exxon is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of Brinker International i.e., Brinker International and Exxon go up and down completely randomly.
Pair Corralation between Brinker International and Exxon
Considering the 90-day investment horizon Brinker International is expected to generate 2.23 times more return on investment than Exxon. However, Brinker International is 2.23 times more volatile than Exxon Mobil Corp. It trades about 0.49 of its potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.02 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. Exxon Mobil Corp
Performance |
| Timeline |
| Brinker International |
| Exxon Mobil Corp |
Brinker International and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Exxon
The main advantage of trading using opposite Brinker International and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon'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 |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |