Correlation Between Wendys and Vail Resorts
Can any of the company-specific risk be diversified away by investing in both Wendys and Vail Resorts 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 Vail Resorts 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 Vail Resorts, you can compare the effects of market volatilities on Wendys and Vail Resorts 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 Vail Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wendys and Vail Resorts.
Diversification Opportunities for Wendys and Vail Resorts
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wendys and Vail is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding The Wendys Co and Vail Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vail Resorts 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 Vail Resorts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vail Resorts has no effect on the direction of Wendys i.e., Wendys and Vail Resorts go up and down completely randomly.
Pair Corralation between Wendys and Vail Resorts
Considering the 90-day investment horizon The Wendys Co is expected to under-perform the Vail Resorts. But the stock apears to be less risky and, when comparing its historical volatility, The Wendys Co is 1.04 times less risky than Vail Resorts. The stock trades about -0.29 of its potential returns per unit of risk. The Vail Resorts is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 17,062 in Vail Resorts on August 27, 2024 and sell it today you would earn a total of 1,651 from holding Vail Resorts or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Wendys Co vs. Vail Resorts
Performance |
| Timeline |
| The Wendys |
| Vail Resorts |
Wendys and Vail Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wendys and Vail Resorts
The main advantage of trading using opposite Wendys and Vail Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendys position performs unexpectedly, Vail Resorts 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 Vail Resorts will offset losses from the drop in Vail Resorts' long position.| Wendys vs. Yum Brands | Wendys vs. Dominos Pizza | Wendys vs. Darden Restaurants | Wendys vs. Papa Johns International |
| Vail Resorts vs. Marriot Vacations Worldwide | Vail Resorts vs. Monarch Casino Resort | Vail Resorts vs. Studio City International | Vail Resorts vs. Hilton Grand Vacations |
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
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Stocks Directory Find actively traded stocks across global markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |