Correlation Between Potbelly and Flanigans Enterprises
Can any of the company-specific risk be diversified away by investing in both Potbelly and Flanigans Enterprises 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 Potbelly and Flanigans Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Potbelly Co and Flanigans Enterprises, you can compare the effects of market volatilities on Potbelly and Flanigans Enterprises 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 Potbelly with a short position of Flanigans Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Potbelly and Flanigans Enterprises.
Diversification Opportunities for Potbelly and Flanigans Enterprises
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Potbelly and Flanigans is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Potbelly Co and Flanigans Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flanigans Enterprises and Potbelly 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 Potbelly Co are associated (or correlated) with Flanigans Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flanigans Enterprises has no effect on the direction of Potbelly i.e., Potbelly and Flanigans Enterprises go up and down completely randomly.
Pair Corralation between Potbelly and Flanigans Enterprises
Given the investment horizon of 90 days Potbelly Co is expected to generate 3.3 times more return on investment than Flanigans Enterprises. However, Potbelly is 3.3 times more volatile than Flanigans Enterprises. It trades about 0.19 of its potential returns per unit of risk. Flanigans Enterprises is currently generating about -0.01 per unit of risk. If you would invest 785.00 in Potbelly Co on October 26, 2024 and sell it today you would earn a total of 408.00 from holding Potbelly Co or generate 51.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.61% |
| Values | Daily Returns |
Potbelly Co vs. Flanigans Enterprises
Performance |
| Timeline |
| Potbelly |
| Flanigans Enterprises |
Potbelly and Flanigans Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Potbelly and Flanigans Enterprises
The main advantage of trading using opposite Potbelly and Flanigans Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Potbelly position performs unexpectedly, Flanigans Enterprises 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 Flanigans Enterprises will offset losses from the drop in Flanigans Enterprises' long position.| Potbelly vs. Chipotle Mexican Grill | Potbelly vs. Dominos Pizza Common | Potbelly vs. Yum Brands | Potbelly vs. The Wendys Co |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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