Correlation Between Wingstop and OneSpaWorld Holdings
Can any of the company-specific risk be diversified away by investing in both Wingstop and OneSpaWorld 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 OneSpaWorld Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wingstop and OneSpaWorld Holdings, you can compare the effects of market volatilities on Wingstop and OneSpaWorld 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 OneSpaWorld Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wingstop and OneSpaWorld Holdings.
Diversification Opportunities for Wingstop and OneSpaWorld Holdings
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wingstop and OneSpaWorld is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Wingstop and OneSpaWorld Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpaWorld 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 OneSpaWorld Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpaWorld Holdings has no effect on the direction of Wingstop i.e., Wingstop and OneSpaWorld Holdings go up and down completely randomly.
Pair Corralation between Wingstop and OneSpaWorld Holdings
Given the investment horizon of 90 days Wingstop is expected to under-perform the OneSpaWorld Holdings. In addition to that, Wingstop is 2.21 times more volatile than OneSpaWorld Holdings. It trades about -0.11 of its total potential returns per unit of risk. OneSpaWorld Holdings is currently generating about 0.22 per unit of volatility. If you would invest 1,646 in OneSpaWorld Holdings on August 26, 2024 and sell it today you would earn a total of 293.00 from holding OneSpaWorld Holdings or generate 17.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wingstop vs. OneSpaWorld Holdings
Performance |
| Timeline |
| Wingstop |
| OneSpaWorld Holdings |
Wingstop and OneSpaWorld Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wingstop and OneSpaWorld Holdings
The main advantage of trading using opposite Wingstop and OneSpaWorld Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wingstop position performs unexpectedly, OneSpaWorld 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 OneSpaWorld Holdings will offset losses from the drop in OneSpaWorld Holdings' long position.| Wingstop vs. Papa Johns International | Wingstop vs. Chipotle Mexican Grill | Wingstop vs. The Wendys Co | Wingstop vs. Dominos Pizza |
| OneSpaWorld Holdings vs. Escalade Incorporated | OneSpaWorld Holdings vs. Johnson Outdoors | OneSpaWorld Holdings vs. Clarus Corp | OneSpaWorld Holdings vs. Six Flags Entertainment |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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