Correlation Between Everi Holdings and Wendys
Can any of the company-specific risk be diversified away by investing in both Everi Holdings and Wendys 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 Everi Holdings and Wendys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everi Holdings and The Wendys Co, you can compare the effects of market volatilities on Everi Holdings and Wendys 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 Everi Holdings with a short position of Wendys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everi Holdings and Wendys.
Diversification Opportunities for Everi Holdings and Wendys
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Everi and Wendys is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Everi Holdings and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys and Everi Holdings 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 Everi Holdings are associated (or correlated) with Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of Everi Holdings i.e., Everi Holdings and Wendys go up and down completely randomly.
Pair Corralation between Everi Holdings and Wendys
Given the investment horizon of 90 days Everi Holdings is expected to generate 0.08 times more return on investment than Wendys. However, Everi Holdings is 11.78 times less risky than Wendys. It trades about 0.19 of its potential returns per unit of risk. The Wendys Co is currently generating about -0.19 per unit of risk. If you would invest 1,333 in Everi Holdings on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Everi Holdings or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everi Holdings vs. The Wendys Co
Performance |
| Timeline |
| Everi Holdings |
| The Wendys |
Everi Holdings and Wendys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everi Holdings and Wendys
The main advantage of trading using opposite Everi Holdings and Wendys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everi Holdings position performs unexpectedly, Wendys 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 Wendys will offset losses from the drop in Wendys' long position.| Everi Holdings vs. Accel Entertainment | Everi Holdings vs. Light Wonder | Everi Holdings vs. Inspired Entertainment | Everi Holdings vs. International Game Technology |
| Wendys vs. Yum Brands | Wendys vs. Dominos Pizza | Wendys vs. Darden Restaurants | Wendys vs. Papa Johns International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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