Correlation Between El Pollo and SUPER HI
Can any of the company-specific risk be diversified away by investing in both El Pollo and SUPER HI 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 SUPER HI 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 SUPER HI INTERNATIONAL, you can compare the effects of market volatilities on El Pollo and SUPER HI 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 SUPER HI. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Pollo and SUPER HI.
Diversification Opportunities for El Pollo and SUPER HI
Very good diversification
The 3 months correlation between LOCO and SUPER is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding El Pollo Loco and SUPER HI INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER HI INTERNATIONAL 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 SUPER HI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER HI INTERNATIONAL has no effect on the direction of El Pollo i.e., El Pollo and SUPER HI go up and down completely randomly.
Pair Corralation between El Pollo and SUPER HI
Given the investment horizon of 90 days El Pollo Loco is expected to under-perform the SUPER HI. But the stock apears to be less risky and, when comparing its historical volatility, El Pollo Loco is 2.47 times less risky than SUPER HI. The stock trades about -0.06 of its potential returns per unit of risk. The SUPER HI INTERNATIONAL is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,470 in SUPER HI INTERNATIONAL on September 13, 2024 and sell it today you would earn a total of 915.00 from holding SUPER HI INTERNATIONAL or generate 62.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Pollo Loco vs. SUPER HI INTERNATIONAL
Performance |
| Timeline |
| El Pollo Loco |
| SUPER HI INTERNATIONAL |
El Pollo and SUPER HI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Pollo and SUPER HI
The main advantage of trading using opposite El Pollo and SUPER HI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Pollo position performs unexpectedly, SUPER HI 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 SUPER HI will offset losses from the drop in SUPER HI's long position.| El Pollo vs. FAT Brands | El Pollo vs. Potbelly Co | El Pollo vs. BJs Restaurants | El Pollo vs. One Group Hospitality |
| SUPER HI vs. Verde Clean Fuels | SUPER HI vs. Boyd Gaming | SUPER HI vs. Yum Brands | SUPER HI vs. Playstudios |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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