Correlation Between Bloomin Brands and Brinker International
Can any of the company-specific risk be diversified away by investing in both Bloomin Brands and Brinker International 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 Bloomin Brands and Brinker International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomin Brands and Brinker International, you can compare the effects of market volatilities on Bloomin Brands and Brinker International 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 Bloomin Brands with a short position of Brinker International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomin Brands and Brinker International.
Diversification Opportunities for Bloomin Brands and Brinker International
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bloomin and Brinker is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bloomin Brands and Brinker International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinker International and Bloomin Brands 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 Bloomin Brands are associated (or correlated) with Brinker International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinker International has no effect on the direction of Bloomin Brands i.e., Bloomin Brands and Brinker International go up and down completely randomly.
Pair Corralation between Bloomin Brands and Brinker International
Given the investment horizon of 90 days Bloomin Brands is expected to under-perform the Brinker International. But the stock apears to be less risky and, when comparing its historical volatility, Bloomin Brands is 1.79 times less risky than Brinker International. The stock trades about -0.08 of its potential returns per unit of risk. The Brinker International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,746 in Brinker International on January 26, 2024 and sell it today you would earn a total of 13.00 from holding Brinker International or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomin Brands vs. Brinker International
Performance |
| Timeline |
| Bloomin Brands |
| Brinker International |
Bloomin Brands and Brinker International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomin Brands and Brinker International
The main advantage of trading using opposite Bloomin Brands and Brinker International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomin Brands position performs unexpectedly, Brinker International 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 Brinker International will offset losses from the drop in Brinker International's long position.| Bloomin Brands vs. Dine Brands Global | Bloomin Brands vs. BJs Restaurants | Bloomin Brands vs. The Cheesecake Factory | Bloomin Brands vs. Brinker International |
| Brinker International vs. Dennys Corp | Brinker International vs. Bloomin Brands | Brinker International vs. Chuys Holdings | Brinker International vs. Jack In The |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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