Correlation Between Red Robin and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Red Robin and Biglari Holdings 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 Biglari Holdings 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 Biglari Holdings, you can compare the effects of market volatilities on Red Robin and Biglari Holdings 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 Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Robin and Biglari Holdings.
Diversification Opportunities for Red Robin and Biglari Holdings
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Red and Biglari is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Red Robin Gourmet and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings 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 Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Red Robin i.e., Red Robin and Biglari Holdings go up and down completely randomly.
Pair Corralation between Red Robin and Biglari Holdings
Given the investment horizon of 90 days Red Robin Gourmet is expected to under-perform the Biglari Holdings. In addition to that, Red Robin is 1.58 times more volatile than Biglari Holdings. It trades about -0.07 of its total potential returns per unit of risk. Biglari Holdings is currently generating about 0.34 per unit of volatility. If you would invest 17,279 in Biglari Holdings on August 30, 2024 and sell it today you would earn a total of 4,221 from holding Biglari Holdings or generate 24.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Robin Gourmet vs. Biglari Holdings
Performance |
| Timeline |
| Red Robin Gourmet |
| Biglari Holdings |
Red Robin and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Robin and Biglari Holdings
The main advantage of trading using opposite Red Robin and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Robin position performs unexpectedly, Biglari Holdings 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.| Red Robin vs. Dine Brands Global | Red Robin vs. Bloomin Brands | Red Robin vs. BJs Restaurants | Red Robin vs. The Cheesecake Factory |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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