Correlation Between El Pollo and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both El Pollo 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 El Pollo and Biglari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between El Pollo Loco and Biglari Holdings, you can compare the effects of market volatilities on El Pollo 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 El Pollo with a short position of Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Pollo and Biglari Holdings.
Diversification Opportunities for El Pollo and Biglari Holdings
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LOCO and Biglari is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding El Pollo Loco and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and El Pollo 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 El Pollo Loco 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 El Pollo i.e., El Pollo and Biglari Holdings go up and down completely randomly.
Pair Corralation between El Pollo and Biglari Holdings
Given the investment horizon of 90 days El Pollo Loco is expected to generate 0.47 times more return on investment than Biglari Holdings. However, El Pollo Loco is 2.13 times less risky than Biglari Holdings. It trades about 0.18 of its potential returns per unit of risk. Biglari Holdings is currently generating about -0.18 per unit of risk. If you would invest 1,128 in El Pollo Loco on November 5, 2024 and sell it today you would earn a total of 59.00 from holding El Pollo Loco or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Pollo Loco vs. Biglari Holdings
Performance |
| Timeline |
| El Pollo Loco |
| Biglari Holdings |
El Pollo and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Pollo and Biglari Holdings
The main advantage of trading using opposite El Pollo and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Pollo 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.| El Pollo vs. FAT Brands | El Pollo vs. Potbelly Co | El Pollo vs. BJs Restaurants | El Pollo vs. One Group Hospitality |
| Biglari Holdings vs. Flanigans Enterprises | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Brinker International | Biglari Holdings vs. Bloomin Brands |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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