Correlation Between Wendys and Everi Holdings
Can any of the company-specific risk be diversified away by investing in both Wendys and Everi Holdings 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 Wendys and Everi Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Wendys Co and Everi Holdings, you can compare the effects of market volatilities on Wendys and Everi 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 Wendys with a short position of Everi Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wendys and Everi Holdings.
Diversification Opportunities for Wendys and Everi Holdings
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wendys and Everi is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding The Wendys Co and Everi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everi Holdings and Wendys 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 The Wendys Co are associated (or correlated) with Everi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everi Holdings has no effect on the direction of Wendys i.e., Wendys and Everi Holdings go up and down completely randomly.
Pair Corralation between Wendys and Everi Holdings
Considering the 90-day investment horizon The Wendys Co is expected to under-perform the Everi Holdings. But the stock apears to be less risky and, when comparing its historical volatility, The Wendys Co is 1.99 times less risky than Everi Holdings. The stock trades about -0.04 of its potential returns per unit of risk. The Everi Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,853 in Everi Holdings on November 1, 2024 and sell it today you would lose (493.00) from holding Everi Holdings or give up 26.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Wendys Co vs. Everi Holdings
Performance |
| Timeline |
| The Wendys |
| Everi Holdings |
Wendys and Everi Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wendys and Everi Holdings
The main advantage of trading using opposite Wendys and Everi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendys position performs unexpectedly, Everi 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 Everi Holdings will offset losses from the drop in Everi Holdings' long position.The idea behind The Wendys Co and Everi Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Everi Holdings vs. Accel Entertainment | Everi Holdings vs. Light Wonder | Everi Holdings vs. Inspired Entertainment | Everi Holdings vs. International Game Technology |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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