Correlation Between One Group and Brinker International
Can any of the company-specific risk be diversified away by investing in both One Group and Brinker International 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 Brinker International 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 Brinker International, you can compare the effects of market volatilities on One Group and Brinker International 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 Brinker International. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Group and Brinker International.
Diversification Opportunities for One Group and Brinker International
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between One and Brinker is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding One Group Hospitality and Brinker International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinker International 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 Brinker International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinker International has no effect on the direction of One Group i.e., One Group and Brinker International go up and down completely randomly.
Pair Corralation between One Group and Brinker International
Given the investment horizon of 90 days One Group is expected to generate 9.21 times less return on investment than Brinker International. In addition to that, One Group is 1.9 times more volatile than Brinker International. It trades about 0.03 of its total potential returns per unit of risk. Brinker International is currently generating about 0.52 per unit of volatility. If you would invest 9,773 in Brinker International on August 28, 2024 and sell it today you would earn a total of 3,325 from holding Brinker International or generate 34.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
One Group Hospitality vs. Brinker International
Performance |
| Timeline |
| One Group Hospitality |
| Brinker International |
One Group and Brinker International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Group and Brinker International
The main advantage of trading using opposite One Group and Brinker International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Group position performs unexpectedly, Brinker International 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 Brinker International will offset losses from the drop in Brinker International's long position.| One Group vs. FAT Brands | One Group vs. Potbelly Co | One Group vs. BJs Restaurants | One Group vs. Rave Restaurant Group |
| Brinker International vs. Dennys Corp | Brinker International vs. Bloomin Brands | Brinker International vs. Jack In The | Brinker International vs. Dine Brands Global |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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