Correlation Between Papa Johns and PlayAGS
Can any of the company-specific risk be diversified away by investing in both Papa Johns and PlayAGS 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 Papa Johns and PlayAGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Papa Johns International and PlayAGS, you can compare the effects of market volatilities on Papa Johns and PlayAGS 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 Papa Johns with a short position of PlayAGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Papa Johns and PlayAGS.
Diversification Opportunities for Papa Johns and PlayAGS
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Papa and PlayAGS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Papa Johns International and PlayAGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayAGS and Papa Johns 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 Papa Johns International are associated (or correlated) with PlayAGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayAGS has no effect on the direction of Papa Johns i.e., Papa Johns and PlayAGS go up and down completely randomly.
Pair Corralation between Papa Johns and PlayAGS
Given the investment horizon of 90 days Papa Johns International is expected to under-perform the PlayAGS. But the stock apears to be less risky and, when comparing its historical volatility, Papa Johns International is 1.45 times less risky than PlayAGS. The stock trades about -0.04 of its potential returns per unit of risk. The PlayAGS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 510.00 in PlayAGS on September 2, 2024 and sell it today you would earn a total of 652.00 from holding PlayAGS or generate 127.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Papa Johns International vs. PlayAGS
Performance |
| Timeline |
| Papa Johns International |
| PlayAGS |
Papa Johns and PlayAGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Papa Johns and PlayAGS
The main advantage of trading using opposite Papa Johns and PlayAGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Papa Johns position performs unexpectedly, PlayAGS 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 PlayAGS will offset losses from the drop in PlayAGS's long position.| Papa Johns vs. Yum Brands | Papa Johns vs. Wingstop | Papa Johns vs. Darden Restaurants | Papa Johns vs. Chipotle Mexican Grill |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |