Correlation Between AUTOMATIC and Biglari Holdings
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By analyzing existing cross correlation between AUTOMATIC DATA PROCESSING and Biglari Holdings, you can compare the effects of market volatilities on AUTOMATIC 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 AUTOMATIC with a short position of Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUTOMATIC and Biglari Holdings.
Diversification Opportunities for AUTOMATIC and Biglari Holdings
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AUTOMATIC and Biglari is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding AUTOMATIC DATA PROCESSING and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and AUTOMATIC 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 AUTOMATIC DATA PROCESSING 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 AUTOMATIC i.e., AUTOMATIC and Biglari Holdings go up and down completely randomly.
Pair Corralation between AUTOMATIC and Biglari Holdings
Assuming the 90 days trading horizon AUTOMATIC DATA PROCESSING is expected to under-perform the Biglari Holdings. But the bond apears to be less risky and, when comparing its historical volatility, AUTOMATIC DATA PROCESSING is 1.61 times less risky than Biglari Holdings. The bond trades about -0.12 of its potential returns per unit of risk. The Biglari Holdings is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 18,548 in Biglari Holdings on September 13, 2024 and sell it today you would earn a total of 4,312 from holding Biglari Holdings or generate 23.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUTOMATIC DATA PROCESSING vs. Biglari Holdings
Performance |
| Timeline |
| AUTOMATIC DATA PROCESSING |
| Biglari Holdings |
AUTOMATIC and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUTOMATIC and Biglari Holdings
The main advantage of trading using opposite AUTOMATIC and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUTOMATIC 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.| AUTOMATIC vs. Biglari Holdings | AUTOMATIC vs. Boyd Gaming | AUTOMATIC vs. Magnite | AUTOMATIC vs. Dine Brands Global |
| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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