Correlation Between Red Robin and Bagger Daves
Can any of the company-specific risk be diversified away by investing in both Red Robin and Bagger Daves 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 Red Robin and Bagger Daves into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Robin Gourmet and Bagger Daves Burger, you can compare the effects of market volatilities on Red Robin and Bagger Daves 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 Red Robin with a short position of Bagger Daves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Robin and Bagger Daves.
Diversification Opportunities for Red Robin and Bagger Daves
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Red and Bagger is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Red Robin Gourmet and Bagger Daves Burger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bagger Daves Burger and Red Robin 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 Red Robin Gourmet are associated (or correlated) with Bagger Daves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bagger Daves Burger has no effect on the direction of Red Robin i.e., Red Robin and Bagger Daves go up and down completely randomly.
Pair Corralation between Red Robin and Bagger Daves
Given the investment horizon of 90 days Red Robin Gourmet is expected to under-perform the Bagger Daves. In addition to that, Red Robin is 1.0 times more volatile than Bagger Daves Burger. It trades about -0.57 of its total potential returns per unit of risk. Bagger Daves Burger is currently generating about -0.26 per unit of volatility. If you would invest 5.70 in Bagger Daves Burger on November 28, 2024 and sell it today you would lose (0.89) from holding Bagger Daves Burger or give up 15.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Red Robin Gourmet vs. Bagger Daves Burger
Performance |
| Timeline |
| Red Robin Gourmet |
| Bagger Daves Burger |
Red Robin and Bagger Daves Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Robin and Bagger Daves
The main advantage of trading using opposite Red Robin and Bagger Daves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Robin position performs unexpectedly, Bagger Daves 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 Bagger Daves will offset losses from the drop in Bagger Daves' long position.| Red Robin vs. Dine Brands Global | Red Robin vs. Bloomin Brands | Red Robin vs. BJs Restaurants | Red Robin vs. The Cheesecake Factory |
| Bagger Daves vs. Alsea SAB de | Bagger Daves vs. Marstons PLC | Bagger Daves vs. Marstons PLC | Bagger Daves vs. Spot Coffee |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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