Correlation Between One Group and Dine Brands
Can any of the company-specific risk be diversified away by investing in both One Group and Dine Brands 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 Dine Brands 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 Dine Brands Global, you can compare the effects of market volatilities on One Group and Dine Brands 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 Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Group and Dine Brands.
Diversification Opportunities for One Group and Dine Brands
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between One and Dine is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding One Group Hospitality and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global 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 Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of One Group i.e., One Group and Dine Brands go up and down completely randomly.
Pair Corralation between One Group and Dine Brands
Given the investment horizon of 90 days One Group is expected to generate 1.96 times less return on investment than Dine Brands. In addition to that, One Group is 1.27 times more volatile than Dine Brands Global. It trades about 0.05 of its total potential returns per unit of risk. Dine Brands Global is currently generating about 0.12 per unit of volatility. If you would invest 2,995 in Dine Brands Global on August 26, 2024 and sell it today you would earn a total of 301.00 from holding Dine Brands Global or generate 10.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
One Group Hospitality vs. Dine Brands Global
Performance |
| Timeline |
| One Group Hospitality |
| Dine Brands Global |
One Group and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Group and Dine Brands
The main advantage of trading using opposite One Group and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Group position performs unexpectedly, Dine Brands 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 Dine Brands will offset losses from the drop in Dine Brands' 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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