Correlation Between Flanigans Enterprises and Nathans Famous
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Nathans Famous 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 Flanigans Enterprises and Nathans Famous into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flanigans Enterprises and Nathans Famous, you can compare the effects of market volatilities on Flanigans Enterprises and Nathans Famous 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 Flanigans Enterprises with a short position of Nathans Famous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Nathans Famous.
Diversification Opportunities for Flanigans Enterprises and Nathans Famous
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flanigans and Nathans is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Nathans Famous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nathans Famous and Flanigans Enterprises 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 Flanigans Enterprises are associated (or correlated) with Nathans Famous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nathans Famous has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Nathans Famous go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and Nathans Famous
Considering the 90-day investment horizon Flanigans Enterprises is expected to generate 2.14 times more return on investment than Nathans Famous. However, Flanigans Enterprises is 2.14 times more volatile than Nathans Famous. It trades about 0.08 of its potential returns per unit of risk. Nathans Famous is currently generating about -0.02 per unit of risk. If you would invest 2,533 in Flanigans Enterprises on February 28, 2024 and sell it today you would earn a total of 278.00 from holding Flanigans Enterprises or generate 10.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 92.19% |
Values | Daily Returns |
Flanigans Enterprises vs. Nathans Famous
Performance |
Timeline |
Flanigans Enterprises |
Nathans Famous |
Flanigans Enterprises and Nathans Famous Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Flanigans Enterprises and Nathans Famous
The main advantage of trading using opposite Flanigans Enterprises and Nathans Famous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Nathans Famous 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 Nathans Famous will offset losses from the drop in Nathans Famous' long position.Flanigans Enterprises vs. Merck Company | Flanigans Enterprises vs. Deciphera Pharmaceuticals LLC | Flanigans Enterprises vs. Innovator SP 500 | Flanigans Enterprises vs. Americold Realty Trust |
Nathans Famous vs. Merck Company | Nathans Famous vs. Deciphera Pharmaceuticals LLC | Nathans Famous vs. Innovator SP 500 | Nathans Famous vs. Americold Realty Trust |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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