Correlation Between Pinstripes Holdings and Wendys
Can any of the company-specific risk be diversified away by investing in both Pinstripes Holdings and Wendys 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 Pinstripes Holdings and Wendys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinstripes Holdings and The Wendys Co, you can compare the effects of market volatilities on Pinstripes Holdings and Wendys 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 Pinstripes Holdings with a short position of Wendys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinstripes Holdings and Wendys.
Diversification Opportunities for Pinstripes Holdings and Wendys
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pinstripes and Wendys is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pinstripes Holdings and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys and Pinstripes Holdings 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 Pinstripes Holdings are associated (or correlated) with Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of Pinstripes Holdings i.e., Pinstripes Holdings and Wendys go up and down completely randomly.
Pair Corralation between Pinstripes Holdings and Wendys
Given the investment horizon of 90 days Pinstripes Holdings is expected to generate 2.83 times more return on investment than Wendys. However, Pinstripes Holdings is 2.83 times more volatile than The Wendys Co. It trades about -0.06 of its potential returns per unit of risk. The Wendys Co is currently generating about -0.29 per unit of risk. If you would invest 95.00 in Pinstripes Holdings on August 27, 2024 and sell it today you would lose (10.00) from holding Pinstripes Holdings or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinstripes Holdings vs. The Wendys Co
Performance |
| Timeline |
| Pinstripes Holdings |
| The Wendys |
Pinstripes Holdings and Wendys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinstripes Holdings and Wendys
The main advantage of trading using opposite Pinstripes Holdings and Wendys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinstripes Holdings position performs unexpectedly, Wendys 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 Wendys will offset losses from the drop in Wendys' long position.| Pinstripes Holdings vs. MGIC Investment Corp | Pinstripes Holdings vs. Highway Holdings Limited | Pinstripes Holdings vs. Flexible Solutions International | Pinstripes Holdings vs. Summit Materials |
| Wendys vs. Yum Brands | Wendys vs. Dominos Pizza | Wendys vs. Darden Restaurants | Wendys vs. Papa Johns International |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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