Correlation Between One Group and Dennys Corp
Can any of the company-specific risk be diversified away by investing in both One Group and Dennys Corp 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 One Group and Dennys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Group Hospitality and Dennys Corp, you can compare the effects of market volatilities on One Group and Dennys Corp 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 One Group with a short position of Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Group and Dennys Corp.
Diversification Opportunities for One Group and Dennys Corp
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between One and Dennys is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding One Group Hospitality and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp and One Group 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 One Group Hospitality are associated (or correlated) with Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of One Group i.e., One Group and Dennys Corp go up and down completely randomly.
Pair Corralation between One Group and Dennys Corp
Given the investment horizon of 90 days One Group Hospitality is expected to generate 1.51 times more return on investment than Dennys Corp. However, One Group is 1.51 times more volatile than Dennys Corp. It trades about -0.01 of its potential returns per unit of risk. Dennys Corp is currently generating about -0.04 per unit of risk. If you would invest 465.00 in One Group Hospitality on August 24, 2024 and sell it today you would lose (135.00) from holding One Group Hospitality or give up 29.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
One Group Hospitality vs. Dennys Corp
Performance |
| Timeline |
| One Group Hospitality |
| Dennys Corp |
One Group and Dennys Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Group and Dennys Corp
The main advantage of trading using opposite One Group and Dennys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Group position performs unexpectedly, Dennys Corp 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 Dennys Corp will offset losses from the drop in Dennys Corp's long position.| One Group vs. FAT Brands | One Group vs. Potbelly Co | One Group vs. BJs Restaurants | One Group vs. Rave Restaurant Group |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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