Correlation Between Marine Products and Dine Brands
Can any of the company-specific risk be diversified away by investing in both Marine Products 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 Marine Products and Dine Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and Dine Brands Global, you can compare the effects of market volatilities on Marine Products 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 Marine Products with a short position of Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Dine Brands.
Diversification Opportunities for Marine Products and Dine Brands
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Marine and Dine is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products 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 Marine Products 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 Marine Products 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 Marine Products i.e., Marine Products and Dine Brands go up and down completely randomly.
Pair Corralation between Marine Products and Dine Brands
Considering the 90-day investment horizon Marine Products is expected to generate 1.02 times more return on investment than Dine Brands. However, Marine Products is 1.02 times more volatile than Dine Brands Global. It trades about -0.01 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.06 per unit of risk. If you would invest 1,167 in Marine Products on October 25, 2024 and sell it today you would lose (271.00) from holding Marine Products or give up 23.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Products vs. Dine Brands Global
Performance |
| Timeline |
| Marine Products |
| Dine Brands Global |
Marine Products and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Products and Dine Brands
The main advantage of trading using opposite Marine Products and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products 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.| Marine Products vs. Thor Industries | Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies |
| Dine Brands vs. Bank of America | Dine Brands vs. RLJ Lodging Trust | Dine Brands vs. PennyMac Finl Svcs | Dine Brands vs. Newhydrogen |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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