Correlation Between Foxx Development and Dine Brands
Can any of the company-specific risk be diversified away by investing in both Foxx Development and Dine Brands 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 Foxx Development and Dine Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foxx Development Holdings and Dine Brands Global, you can compare the effects of market volatilities on Foxx Development and Dine Brands 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 Foxx Development with a short position of Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foxx Development and Dine Brands.
Diversification Opportunities for Foxx Development and Dine Brands
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Foxx and Dine is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Foxx Development Holdings and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global and Foxx Development 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 Foxx Development Holdings are associated (or correlated) with Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Foxx Development i.e., Foxx Development and Dine Brands go up and down completely randomly.
Pair Corralation between Foxx Development and Dine Brands
Assuming the 90 days horizon Foxx Development Holdings is expected to generate 3.31 times more return on investment than Dine Brands. However, Foxx Development is 3.31 times more volatile than Dine Brands Global. It trades about -0.05 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.17 per unit of risk. If you would invest 14.00 in Foxx Development Holdings on January 5, 2025 and sell it today you would lose (2.00) from holding Foxx Development Holdings or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
Foxx Development Holdings vs. Dine Brands Global
Performance |
| Timeline |
| Foxx Development Holdings |
| Dine Brands Global |
Foxx Development and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foxx Development and Dine Brands
The main advantage of trading using opposite Foxx Development and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foxx Development position performs unexpectedly, Dine Brands 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 Dine Brands will offset losses from the drop in Dine Brands' long position.| Foxx Development vs. Sea | Foxx Development vs. SunLink Health Systems | Foxx Development vs. MYT Netherlands Parent | Foxx Development vs. Ambipar Emergency Response |
| Dine Brands vs. Bloomin Brands | Dine Brands vs. BJs Restaurants | Dine Brands vs. The Cheesecake Factory | Dine Brands vs. Brinker 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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