Correlation Between Potbelly and Jack In
Can any of the company-specific risk be diversified away by investing in both Potbelly and Jack In 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 Jack In into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Potbelly Co and Jack In The, you can compare the effects of market volatilities on Potbelly and Jack In 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 Jack In. Check out your portfolio center. Please also check ongoing floating volatility patterns of Potbelly and Jack In.
Diversification Opportunities for Potbelly and Jack In
Good diversification
The 3 months correlation between Potbelly and Jack is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Potbelly Co and Jack In The in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jack In 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 Jack In. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jack In has no effect on the direction of Potbelly i.e., Potbelly and Jack In go up and down completely randomly.
Pair Corralation between Potbelly and Jack In
Given the investment horizon of 90 days Potbelly Co is expected to generate 1.75 times more return on investment than Jack In. However, Potbelly is 1.75 times more volatile than Jack In The. It trades about 0.21 of its potential returns per unit of risk. Jack In The is currently generating about 0.04 per unit of risk. If you would invest 797.00 in Potbelly Co on August 24, 2024 and sell it today you would earn a total of 200.00 from holding Potbelly Co or generate 25.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Potbelly Co vs. Jack In The
Performance |
| Timeline |
| Potbelly |
| Jack In |
Potbelly and Jack In Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Potbelly and Jack In
The main advantage of trading using opposite Potbelly and Jack In positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Potbelly position performs unexpectedly, Jack In 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 Jack In will offset losses from the drop in Jack In's long position.| Potbelly vs. FAT Brands | Potbelly vs. BJs Restaurants | Potbelly vs. One Group Hospitality | Potbelly vs. El Pollo Loco |
| Jack In vs. Dine Brands Global | Jack In vs. Bloomin Brands | Jack In vs. BJs Restaurants | Jack In vs. The Cheesecake Factory |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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