Correlation Between Globalfoundries and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Globalfoundries and Biglari Holdings 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 Globalfoundries and Biglari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalfoundries and Biglari Holdings, you can compare the effects of market volatilities on Globalfoundries and Biglari Holdings 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 Globalfoundries with a short position of Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalfoundries and Biglari Holdings.
Diversification Opportunities for Globalfoundries and Biglari Holdings
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globalfoundries and Biglari is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and Globalfoundries 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 Globalfoundries are associated (or correlated) with Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Globalfoundries i.e., Globalfoundries and Biglari Holdings go up and down completely randomly.
Pair Corralation between Globalfoundries and Biglari Holdings
Considering the 90-day investment horizon Globalfoundries is expected to generate 1.16 times less return on investment than Biglari Holdings. In addition to that, Globalfoundries is 1.58 times more volatile than Biglari Holdings. It trades about 0.22 of its total potential returns per unit of risk. Biglari Holdings is currently generating about 0.4 per unit of volatility. If you would invest 17,300 in Biglari Holdings on September 5, 2024 and sell it today you would earn a total of 5,118 from holding Biglari Holdings or generate 29.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globalfoundries vs. Biglari Holdings
Performance |
| Timeline |
| Globalfoundries |
| Biglari Holdings |
Globalfoundries and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globalfoundries and Biglari Holdings
The main advantage of trading using opposite Globalfoundries and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalfoundries position performs unexpectedly, Biglari Holdings 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.| Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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