Correlation Between Turning Point and Dine Brands
Can any of the company-specific risk be diversified away by investing in both Turning Point 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 Turning Point and Dine Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and Dine Brands Global, you can compare the effects of market volatilities on Turning Point 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 Turning Point with a short position of Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and Dine Brands.
Diversification Opportunities for Turning Point and Dine Brands
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Turning and Dine is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands 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 Turning Point 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 Turning Point Brands 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 Turning Point i.e., Turning Point and Dine Brands go up and down completely randomly.
Pair Corralation between Turning Point and Dine Brands
Considering the 90-day investment horizon Turning Point Brands is expected to generate 0.56 times more return on investment than Dine Brands. However, Turning Point Brands is 1.8 times less risky than Dine Brands. It trades about 0.5 of its potential returns per unit of risk. Dine Brands Global is currently generating about 0.18 per unit of risk. If you would invest 4,769 in Turning Point Brands on September 4, 2024 and sell it today you would earn a total of 1,320 from holding Turning Point Brands or generate 27.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turning Point Brands vs. Dine Brands Global
Performance |
| Timeline |
| Turning Point Brands |
| Dine Brands Global |
Turning Point and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and Dine Brands
The main advantage of trading using opposite Turning Point and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point 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.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| Dine Brands vs. Bloomin Brands | Dine Brands vs. BJs Restaurants | Dine Brands vs. The Cheesecake Factory | Dine Brands vs. Brinker International |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |