Correlation Between Papa Johns and One Group
Can any of the company-specific risk be diversified away by investing in both Papa Johns and One Group 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 One Group 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 One Group Hospitality, you can compare the effects of market volatilities on Papa Johns and One Group 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 One Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Papa Johns and One Group.
Diversification Opportunities for Papa Johns and One Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Papa and One is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Papa Johns International and One Group Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Group Hospitality 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 One Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Group Hospitality has no effect on the direction of Papa Johns i.e., Papa Johns and One Group go up and down completely randomly.
Pair Corralation between Papa Johns and One Group
Given the investment horizon of 90 days Papa Johns International is expected to under-perform the One Group. But the stock apears to be less risky and, when comparing its historical volatility, Papa Johns International is 1.68 times less risky than One Group. The stock trades about -0.06 of its potential returns per unit of risk. The One Group Hospitality is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 831.00 in One Group Hospitality on October 30, 2024 and sell it today you would lose (446.00) from holding One Group Hospitality or give up 53.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Papa Johns International vs. One Group Hospitality
Performance |
| Timeline |
| Papa Johns International |
| One Group Hospitality |
Papa Johns and One Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Papa Johns and One Group
The main advantage of trading using opposite Papa Johns and One Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Papa Johns position performs unexpectedly, One Group 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 One Group will offset losses from the drop in One Group's long position.| Papa Johns vs. Yum Brands | Papa Johns vs. Wingstop | Papa Johns vs. Darden Restaurants | Papa Johns vs. Chipotle Mexican Grill |
| One Group vs. FAT Brands | One Group vs. Potbelly Co | One Group vs. BJs Restaurants | One Group vs. Rave Restaurant Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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