Correlation Between FAT Brands and Jack In
Can any of the company-specific risk be diversified away by investing in both FAT Brands and Jack In 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 Jack In into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAT Brands and Jack In The, you can compare the effects of market volatilities on FAT Brands and Jack In 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 Jack In. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAT Brands and Jack In.
Diversification Opportunities for FAT Brands and Jack In
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between FAT and Jack is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding FAT Brands and Jack In The in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jack In 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 Jack In. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jack In has no effect on the direction of FAT Brands i.e., FAT Brands and Jack In go up and down completely randomly.
Pair Corralation between FAT Brands and Jack In
Assuming the 90 days horizon FAT Brands is expected to generate 0.41 times more return on investment than Jack In. However, FAT Brands is 2.44 times less risky than Jack In. It trades about 0.11 of its potential returns per unit of risk. Jack In The is currently generating about -0.09 per unit of risk. If you would invest 932.00 in FAT Brands on August 28, 2024 and sell it today you would earn a total of 22.00 from holding FAT Brands or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAT Brands vs. Jack In The
Performance |
| Timeline |
| FAT Brands |
| Jack In |
FAT Brands and Jack In Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAT Brands and Jack In
The main advantage of trading using opposite FAT Brands and Jack In positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAT Brands position performs unexpectedly, Jack In 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 Jack In will offset losses from the drop in Jack In's long position.The idea behind FAT Brands and Jack In The pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Jack In vs. Dine Brands Global | Jack In vs. Bloomin Brands | Jack In vs. BJs Restaurants | Jack In vs. The Cheesecake Factory |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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