Correlation Between Good Times and Dennys Corp
Can any of the company-specific risk be diversified away by investing in both Good Times and Dennys Corp 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 Good Times and Dennys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Good Times Restaurants and Dennys Corp, you can compare the effects of market volatilities on Good Times and Dennys Corp 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 Good Times with a short position of Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Good Times and Dennys Corp.
Diversification Opportunities for Good Times and Dennys Corp
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Good and Dennys is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Good Times Restaurants and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp and Good Times 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 Good Times Restaurants are associated (or correlated) with Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of Good Times i.e., Good Times and Dennys Corp go up and down completely randomly.
Pair Corralation between Good Times and Dennys Corp
Given the investment horizon of 90 days Good Times Restaurants is expected to generate 1.17 times more return on investment than Dennys Corp. However, Good Times is 1.17 times more volatile than Dennys Corp. It trades about 0.02 of its potential returns per unit of risk. Dennys Corp is currently generating about -0.03 per unit of risk. If you would invest 248.00 in Good Times Restaurants on August 27, 2024 and sell it today you would earn a total of 16.00 from holding Good Times Restaurants or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Good Times Restaurants vs. Dennys Corp
Performance |
| Timeline |
| Good Times Restaurants |
| Dennys Corp |
Good Times and Dennys Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Good Times and Dennys Corp
The main advantage of trading using opposite Good Times and Dennys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Good Times position performs unexpectedly, Dennys Corp 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 Dennys Corp will offset losses from the drop in Dennys Corp's long position.| Good Times vs. Nathans Famous | Good Times vs. FAT Brands | Good Times vs. El Pollo Loco | Good Times vs. Ark Restaurants Corp |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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