Correlation Between Wingstop and Anglo American
Can any of the company-specific risk be diversified away by investing in both Wingstop and Anglo American 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 Wingstop and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wingstop and Anglo American Platinum, you can compare the effects of market volatilities on Wingstop and Anglo American 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 Wingstop with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wingstop and Anglo American.
Diversification Opportunities for Wingstop and Anglo American
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wingstop and Anglo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Wingstop and Anglo American Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American Platinum and Wingstop 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 Wingstop are associated (or correlated) with Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American Platinum has no effect on the direction of Wingstop i.e., Wingstop and Anglo American go up and down completely randomly.
Pair Corralation between Wingstop and Anglo American
Given the investment horizon of 90 days Wingstop is expected to generate 0.41 times more return on investment than Anglo American. However, Wingstop is 2.43 times less risky than Anglo American. It trades about 0.08 of its potential returns per unit of risk. Anglo American Platinum is currently generating about -0.01 per unit of risk. If you would invest 15,673 in Wingstop on August 24, 2024 and sell it today you would earn a total of 18,087 from holding Wingstop or generate 115.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 73.79% |
| Values | Daily Returns |
Wingstop vs. Anglo American Platinum
Performance |
| Timeline |
| Wingstop |
| Anglo American Platinum |
Wingstop and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wingstop and Anglo American
The main advantage of trading using opposite Wingstop and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wingstop position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| Wingstop vs. Papa Johns International | Wingstop vs. Chipotle Mexican Grill | Wingstop vs. The Wendys Co | Wingstop vs. Dominos Pizza |
| Anglo American vs. Wingstop | Anglo American vs. Merit Medical Systems | Anglo American vs. The Wendys Co | Anglo American vs. Playa Hotels Resorts |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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