Correlation Between Wingstop and Jeffs Brands
Can any of the company-specific risk be diversified away by investing in both Wingstop and Jeffs Brands 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 Jeffs Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wingstop and Jeffs Brands, you can compare the effects of market volatilities on Wingstop and Jeffs Brands 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 Jeffs Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wingstop and Jeffs Brands.
Diversification Opportunities for Wingstop and Jeffs Brands
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wingstop and Jeffs is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Wingstop and Jeffs Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffs Brands 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 Jeffs Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffs Brands has no effect on the direction of Wingstop i.e., Wingstop and Jeffs Brands go up and down completely randomly.
Pair Corralation between Wingstop and Jeffs Brands
Given the investment horizon of 90 days Wingstop is expected to generate 9.05 times less return on investment than Jeffs Brands. But when comparing it to its historical volatility, Wingstop is 18.57 times less risky than Jeffs Brands. It trades about 0.08 of its potential returns per unit of risk. Jeffs Brands is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 861.00 in Jeffs Brands on September 13, 2024 and sell it today you would lose (602.00) from holding Jeffs Brands or give up 69.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wingstop vs. Jeffs Brands
Performance |
| Timeline |
| Wingstop |
| Jeffs Brands |
Wingstop and Jeffs Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wingstop and Jeffs Brands
The main advantage of trading using opposite Wingstop and Jeffs Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wingstop position performs unexpectedly, Jeffs Brands 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 Jeffs Brands will offset losses from the drop in Jeffs Brands' long position.| Wingstop vs. Papa Johns International | Wingstop vs. Chipotle Mexican Grill | Wingstop vs. The Wendys Co | Wingstop vs. Dominos Pizza |
| Jeffs Brands vs. Twilio Inc | Jeffs Brands vs. Getty Images Holdings | Jeffs Brands vs. Baidu Inc | Jeffs Brands vs. Snap Inc |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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