Correlation Between Wendys and Pinstripes Holdings
Can any of the company-specific risk be diversified away by investing in both Wendys and Pinstripes 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 Pinstripes 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 Pinstripes Holdings, you can compare the effects of market volatilities on Wendys and Pinstripes 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 Pinstripes Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wendys and Pinstripes Holdings.
Diversification Opportunities for Wendys and Pinstripes Holdings
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wendys and Pinstripes is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Wendys Co and Pinstripes Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinstripes 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 Pinstripes Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinstripes Holdings has no effect on the direction of Wendys i.e., Wendys and Pinstripes Holdings go up and down completely randomly.
Pair Corralation between Wendys and Pinstripes Holdings
Considering the 90-day investment horizon The Wendys Co is expected to under-perform the Pinstripes Holdings. But the stock apears to be less risky and, when comparing its historical volatility, The Wendys Co is 3.04 times less risky than Pinstripes Holdings. The stock trades about -0.19 of its potential returns per unit of risk. The Pinstripes Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Pinstripes Holdings on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Pinstripes Holdings or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Wendys Co vs. Pinstripes Holdings
Performance |
| Timeline |
| The Wendys |
| Pinstripes Holdings |
Wendys and Pinstripes Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wendys and Pinstripes Holdings
The main advantage of trading using opposite Wendys and Pinstripes Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendys position performs unexpectedly, Pinstripes 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 Pinstripes Holdings will offset losses from the drop in Pinstripes Holdings' long position.| Wendys vs. Yum Brands | Wendys vs. Dominos Pizza | Wendys vs. Darden Restaurants | Wendys vs. Papa Johns International |
| Pinstripes Holdings vs. MGIC Investment Corp | Pinstripes Holdings vs. Highway Holdings Limited | Pinstripes Holdings vs. Flexible Solutions International | Pinstripes Holdings vs. Summit Materials |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |