Correlation Between FAT Brands and Flanigans Enterprises
Can any of the company-specific risk be diversified away by investing in both FAT Brands and Flanigans Enterprises 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 FAT Brands and Flanigans Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAT Brands and Flanigans Enterprises, you can compare the effects of market volatilities on FAT Brands and Flanigans Enterprises 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 FAT Brands with a short position of Flanigans Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAT Brands and Flanigans Enterprises.
Diversification Opportunities for FAT Brands and Flanigans Enterprises
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FAT and Flanigans is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding FAT Brands and Flanigans Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flanigans Enterprises and FAT Brands 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 FAT Brands are associated (or correlated) with Flanigans Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flanigans Enterprises has no effect on the direction of FAT Brands i.e., FAT Brands and Flanigans Enterprises go up and down completely randomly.
Pair Corralation between FAT Brands and Flanigans Enterprises
Assuming the 90 days horizon FAT Brands is expected to generate 5.78 times more return on investment than Flanigans Enterprises. However, FAT Brands is 5.78 times more volatile than Flanigans Enterprises. It trades about 0.16 of its potential returns per unit of risk. Flanigans Enterprises is currently generating about 0.07 per unit of risk. If you would invest 313.00 in FAT Brands on November 18, 2024 and sell it today you would earn a total of 62.00 from holding FAT Brands or generate 19.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
FAT Brands vs. Flanigans Enterprises
Performance |
| Timeline |
| FAT Brands |
| Flanigans Enterprises |
FAT Brands and Flanigans Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAT Brands and Flanigans Enterprises
The main advantage of trading using opposite FAT Brands and Flanigans Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAT Brands position performs unexpectedly, Flanigans Enterprises 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 Flanigans Enterprises will offset losses from the drop in Flanigans Enterprises' long position.| FAT Brands vs. FAT Brands | FAT Brands vs. Brinker International | FAT Brands vs. Jack In The | FAT Brands vs. Potbelly Co |
| Flanigans Enterprises vs. FAT Brands | Flanigans Enterprises vs. Potbelly Co | Flanigans Enterprises vs. BJs Restaurants | Flanigans Enterprises 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| 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 | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |