Correlation Between Nathans Famous and Pinstripes Holdings
Can any of the company-specific risk be diversified away by investing in both Nathans Famous and Pinstripes 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 Nathans Famous and Pinstripes Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nathans Famous and Pinstripes Holdings, you can compare the effects of market volatilities on Nathans Famous and Pinstripes 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 Nathans Famous with a short position of Pinstripes Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nathans Famous and Pinstripes Holdings.
Diversification Opportunities for Nathans Famous and Pinstripes Holdings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nathans and Pinstripes is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nathans Famous and Pinstripes Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinstripes Holdings and Nathans Famous 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 Nathans Famous are associated (or correlated) with Pinstripes Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinstripes Holdings has no effect on the direction of Nathans Famous i.e., Nathans Famous and Pinstripes Holdings go up and down completely randomly.
Pair Corralation between Nathans Famous and Pinstripes Holdings
Given the investment horizon of 90 days Nathans Famous is expected to generate 0.25 times more return on investment than Pinstripes Holdings. However, Nathans Famous is 3.98 times less risky than Pinstripes Holdings. It trades about 0.05 of its potential returns per unit of risk. Pinstripes Holdings is currently generating about -0.14 per unit of risk. If you would invest 7,132 in Nathans Famous on October 26, 2024 and sell it today you would earn a total of 785.00 from holding Nathans Famous or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nathans Famous vs. Pinstripes Holdings
Performance |
| Timeline |
| Nathans Famous |
| Pinstripes Holdings |
Nathans Famous and Pinstripes Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nathans Famous and Pinstripes Holdings
The main advantage of trading using opposite Nathans Famous and Pinstripes Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nathans Famous position performs unexpectedly, Pinstripes 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 Pinstripes Holdings will offset losses from the drop in Pinstripes Holdings' long position.| Nathans Famous vs. Noble Romans | Nathans Famous vs. Good Times Restaurants | Nathans Famous vs. Bagger Daves Burger | Nathans Famous vs. Flanigans Enterprises |
| Pinstripes Holdings vs. Summit Hotel Properties | Pinstripes Holdings vs. Starbucks | Pinstripes Holdings vs. CECO Environmental Corp | Pinstripes Holdings vs. BJs Restaurants |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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