Correlation Between Wingstop and SGHC
Can any of the company-specific risk be diversified away by investing in both Wingstop and SGHC 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 SGHC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wingstop and SGHC Limited, you can compare the effects of market volatilities on Wingstop and SGHC 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 SGHC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wingstop and SGHC.
Diversification Opportunities for Wingstop and SGHC
Excellent diversification
The 3 months correlation between Wingstop and SGHC is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Wingstop and SGHC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGHC Limited 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 SGHC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGHC Limited has no effect on the direction of Wingstop i.e., Wingstop and SGHC go up and down completely randomly.
Pair Corralation between Wingstop and SGHC
Given the investment horizon of 90 days Wingstop is expected to under-perform the SGHC. In addition to that, Wingstop is 1.06 times more volatile than SGHC Limited. It trades about -0.06 of its total potential returns per unit of risk. SGHC Limited is currently generating about 0.46 per unit of volatility. If you would invest 418.00 in SGHC Limited on August 30, 2024 and sell it today you would earn a total of 255.00 from holding SGHC Limited or generate 61.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wingstop vs. SGHC Limited
Performance |
| Timeline |
| Wingstop |
| SGHC Limited |
Wingstop and SGHC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wingstop and SGHC
The main advantage of trading using opposite Wingstop and SGHC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wingstop position performs unexpectedly, SGHC 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 SGHC will offset losses from the drop in SGHC's long position.| Wingstop vs. Papa Johns International | Wingstop vs. Chipotle Mexican Grill | Wingstop vs. The Wendys Co | Wingstop vs. Dominos Pizza |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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