Correlation Between Restaurant Brands and Canada Goose
Can any of the company-specific risk be diversified away by investing in both Restaurant Brands and Canada Goose 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 Restaurant Brands and Canada Goose into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Restaurant Brands International and Canada Goose Holdings, you can compare the effects of market volatilities on Restaurant Brands and Canada Goose 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 Restaurant Brands with a short position of Canada Goose. Check out your portfolio center. Please also check ongoing floating volatility patterns of Restaurant Brands and Canada Goose.
Diversification Opportunities for Restaurant Brands and Canada Goose
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Restaurant and Canada is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Restaurant Brands Internationa and Canada Goose Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Goose Holdings and Restaurant Brands 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 Restaurant Brands International are associated (or correlated) with Canada Goose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Goose Holdings has no effect on the direction of Restaurant Brands i.e., Restaurant Brands and Canada Goose go up and down completely randomly.
Pair Corralation between Restaurant Brands and Canada Goose
Assuming the 90 days trading horizon Restaurant Brands International is expected to generate 0.41 times more return on investment than Canada Goose. However, Restaurant Brands International is 2.45 times less risky than Canada Goose. It trades about 0.03 of its potential returns per unit of risk. Canada Goose Holdings is currently generating about -0.03 per unit of risk. If you would invest 8,667 in Restaurant Brands International on August 30, 2024 and sell it today you would earn a total of 1,179 from holding Restaurant Brands International or generate 13.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Restaurant Brands Internationa vs. Canada Goose Holdings
Performance |
| Timeline |
| Restaurant Brands |
| Canada Goose Holdings |
Restaurant Brands and Canada Goose Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Restaurant Brands and Canada Goose
The main advantage of trading using opposite Restaurant Brands and Canada Goose positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Restaurant Brands position performs unexpectedly, Canada Goose 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 Canada Goose will offset losses from the drop in Canada Goose's long position.| Restaurant Brands vs. Canadian Tire | Restaurant Brands vs. Dollarama | Restaurant Brands vs. Nutrien | Restaurant Brands vs. Magna International |
| Canada Goose vs. Aritzia | Canada Goose vs. Restaurant Brands International | Canada Goose vs. Dollarama | Canada Goose vs. Shopify |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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