Correlation Between Biglari Holdings and Dine Brands
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Dine Brands 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 Biglari Holdings and Dine Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Dine Brands Global, you can compare the effects of market volatilities on Biglari Holdings and Dine Brands 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 Biglari Holdings with a short position of Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Dine Brands.
Diversification Opportunities for Biglari Holdings and Dine Brands
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Biglari and Dine is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global and Biglari Holdings 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 Biglari Holdings are associated (or correlated) with Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Dine Brands go up and down completely randomly.
Pair Corralation between Biglari Holdings and Dine Brands
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 1.16 times more return on investment than Dine Brands. However, Biglari Holdings is 1.16 times more volatile than Dine Brands Global. It trades about -0.09 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.22 per unit of risk. If you would invest 20,124 in Biglari Holdings on January 18, 2024 and sell it today you would lose (908.00) from holding Biglari Holdings or give up 4.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Dine Brands Global
Performance |
| Timeline |
| Biglari Holdings |
| Dine Brands Global |
Biglari Holdings and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Dine Brands
The main advantage of trading using opposite Biglari Holdings and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Dine Brands 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 Dine Brands will offset losses from the drop in Dine Brands' long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Dine Brands vs. Bloomin Brands | Dine Brands vs. BJs Restaurants | Dine Brands vs. The Cheesecake Factory | Dine Brands vs. Brinker International |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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