Correlation Between Wingstop and Chuys Holdings
Can any of the company-specific risk be diversified away by investing in both Wingstop and Chuys 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 Wingstop and Chuys Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wingstop and Chuys Holdings, you can compare the effects of market volatilities on Wingstop and Chuys 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 Wingstop with a short position of Chuys Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wingstop and Chuys Holdings.
Diversification Opportunities for Wingstop and Chuys Holdings
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wingstop and Chuys is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Wingstop and Chuys Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuys Holdings 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 Chuys Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuys Holdings has no effect on the direction of Wingstop i.e., Wingstop and Chuys Holdings go up and down completely randomly.
Pair Corralation between Wingstop and Chuys Holdings
Given the investment horizon of 90 days Wingstop is expected to generate 0.79 times more return on investment than Chuys Holdings. However, Wingstop is 1.27 times less risky than Chuys Holdings. It trades about 0.07 of its potential returns per unit of risk. Chuys Holdings is currently generating about 0.02 per unit of risk. If you would invest 20,057 in Wingstop on August 31, 2024 and sell it today you would earn a total of 13,070 from holding Wingstop or generate 65.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.37% |
| Values | Daily Returns |
Wingstop vs. Chuys Holdings
Performance |
| Timeline |
| Wingstop |
| Chuys Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Wingstop and Chuys Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wingstop and Chuys Holdings
The main advantage of trading using opposite Wingstop and Chuys Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wingstop position performs unexpectedly, Chuys 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 Chuys Holdings will offset losses from the drop in Chuys Holdings' long position.| Wingstop vs. RLJ Lodging Trust | Wingstop vs. Aquagold International | Wingstop vs. Stepstone Group | Wingstop vs. Morningstar Unconstrained Allocation |
| Chuys Holdings vs. Brinker International | Chuys Holdings vs. Bloomin Brands | Chuys Holdings vs. FAT Brands | Chuys Holdings vs. Potbelly Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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