Correlation Between Mechel OAO and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Mechel OAO 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 Mechel OAO and Biglari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mechel OAO and Biglari Holdings, you can compare the effects of market volatilities on Mechel OAO 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 Mechel OAO with a short position of Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mechel OAO and Biglari Holdings.
Diversification Opportunities for Mechel OAO and Biglari Holdings
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mechel and Biglari is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mechel OAO and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and Mechel OAO 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 Mechel OAO 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 Mechel OAO i.e., Mechel OAO and Biglari Holdings go up and down completely randomly.
Pair Corralation between Mechel OAO and Biglari Holdings
If you would invest 17,031 in Biglari Holdings on September 1, 2024 and sell it today you would earn a total of 4,012 from holding Biglari Holdings or generate 23.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Mechel OAO vs. Biglari Holdings
Performance |
| Timeline |
| Mechel OAO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Biglari Holdings |
Mechel OAO and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mechel OAO and Biglari Holdings
The main advantage of trading using opposite Mechel OAO and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mechel OAO 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.| Mechel OAO vs. Biglari Holdings | Mechel OAO vs. Viemed Healthcare | Mechel OAO vs. Shake Shack | Mechel OAO vs. The Joint Corp |
| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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