Correlation Between Coffee Holding and Dine Brands
Can any of the company-specific risk be diversified away by investing in both Coffee Holding 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 Coffee Holding and Dine Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coffee Holding Co and Dine Brands Global, you can compare the effects of market volatilities on Coffee Holding 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 Coffee Holding with a short position of Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and Dine Brands.
Diversification Opportunities for Coffee Holding and Dine Brands
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coffee and Dine is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co 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 Coffee Holding 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 Coffee Holding Co 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 Coffee Holding i.e., Coffee Holding and Dine Brands go up and down completely randomly.
Pair Corralation between Coffee Holding and Dine Brands
Considering the 90-day investment horizon Coffee Holding Co is expected to generate 1.94 times more return on investment than Dine Brands. However, Coffee Holding is 1.94 times more volatile than Dine Brands Global. It trades about 0.13 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.04 per unit of risk. If you would invest 106.00 in Coffee Holding Co on November 4, 2024 and sell it today you would earn a total of 289.00 from holding Coffee Holding Co or generate 272.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coffee Holding Co vs. Dine Brands Global
Performance |
| Timeline |
| Coffee Holding |
| Dine Brands Global |
Coffee Holding and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and Dine Brands
The main advantage of trading using opposite Coffee Holding and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding 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.| Coffee Holding vs. Seneca Foods Corp | Coffee Holding vs. J J Snack | Coffee Holding vs. Aryzta AG PK | Coffee Holding vs. Lifeway Foods |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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