Correlation Between Wendys and Six Flags
Can any of the company-specific risk be diversified away by investing in both Wendys and Six Flags 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 Six Flags 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 Six Flags Entertainment, you can compare the effects of market volatilities on Wendys and Six Flags 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 Six Flags. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wendys and Six Flags.
Diversification Opportunities for Wendys and Six Flags
Significant diversification
The 3 months correlation between Wendys and Six is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding The Wendys Co and Six Flags Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Flags Entertainment 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 Six Flags. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Flags Entertainment has no effect on the direction of Wendys i.e., Wendys and Six Flags go up and down completely randomly.
Pair Corralation between Wendys and Six Flags
Considering the 90-day investment horizon The Wendys Co is expected to under-perform the Six Flags. But the stock apears to be less risky and, when comparing its historical volatility, The Wendys Co is 1.3 times less risky than Six Flags. The stock trades about 0.0 of its potential returns per unit of risk. The Six Flags Entertainment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,926 in Six Flags Entertainment on September 3, 2024 and sell it today you would earn a total of 693.00 from holding Six Flags Entertainment or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Wendys Co vs. Six Flags Entertainment
Performance |
| Timeline |
| The Wendys |
| Six Flags Entertainment |
Wendys and Six Flags Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wendys and Six Flags
The main advantage of trading using opposite Wendys and Six Flags positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendys position performs unexpectedly, Six Flags 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 Six Flags will offset losses from the drop in Six Flags' long position.| Wendys vs. Highway Holdings Limited | Wendys vs. QCR Holdings | Wendys vs. Partner Communications | Wendys vs. Acumen Pharmaceuticals |
| Six Flags vs. Planet Fitness | Six Flags vs. Madison Square Garden | Six Flags vs. Mattel Inc | Six Flags vs. Johnson Outdoors |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |