Correlation Between Yum China and Dennys Corp
Can any of the company-specific risk be diversified away by investing in both Yum China and Dennys Corp 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 Yum China and Dennys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yum China Holdings and Dennys Corp, you can compare the effects of market volatilities on Yum China and Dennys Corp 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 Yum China with a short position of Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yum China and Dennys Corp.
Diversification Opportunities for Yum China and Dennys Corp
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Yum and Dennys is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Yum China Holdings and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp and Yum China 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 Yum China Holdings are associated (or correlated) with Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of Yum China i.e., Yum China and Dennys Corp go up and down completely randomly.
Pair Corralation between Yum China and Dennys Corp
Given the investment horizon of 90 days Yum China Holdings is expected to generate 0.88 times more return on investment than Dennys Corp. However, Yum China Holdings is 1.14 times less risky than Dennys Corp. It trades about 0.0 of its potential returns per unit of risk. Dennys Corp is currently generating about -0.03 per unit of risk. If you would invest 5,882 in Yum China Holdings on November 9, 2024 and sell it today you would lose (917.00) from holding Yum China Holdings or give up 15.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yum China Holdings vs. Dennys Corp
Performance |
| Timeline |
| Yum China Holdings |
| Dennys Corp |
Yum China and Dennys Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yum China and Dennys Corp
The main advantage of trading using opposite Yum China and Dennys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yum China position performs unexpectedly, Dennys Corp 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 Dennys Corp will offset losses from the drop in Dennys Corp's long position.| Yum China vs. Darden Restaurants | Yum China vs. The Wendys Co | Yum China vs. Dominos Pizza Common | Yum China vs. Restaurant Brands International |
| Dennys Corp vs. Brinker International | Dennys Corp vs. Bloomin Brands | Dennys Corp vs. Jack In The | Dennys Corp vs. BJs Restaurants |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |