Correlation Between Brinker International and Fiesta Restaurant
Can any of the company-specific risk be diversified away by investing in both Brinker International and Fiesta Restaurant 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 Brinker International and Fiesta Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Fiesta Restaurant Group, you can compare the effects of market volatilities on Brinker International and Fiesta Restaurant 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 Brinker International with a short position of Fiesta Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Fiesta Restaurant.
Diversification Opportunities for Brinker International and Fiesta Restaurant
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brinker and Fiesta is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Fiesta Restaurant Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiesta Restaurant and Brinker International 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 Brinker International are associated (or correlated) with Fiesta Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiesta Restaurant has no effect on the direction of Brinker International i.e., Brinker International and Fiesta Restaurant go up and down completely randomly.
Pair Corralation between Brinker International and Fiesta Restaurant
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 | Significant |
Accuracy | 4.76% |
Values | Daily Returns |
Brinker International vs. Fiesta Restaurant Group
Performance |
Timeline |
Brinker International |
Fiesta Restaurant |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Brinker International and Fiesta Restaurant Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brinker International and Fiesta Restaurant
The main advantage of trading using opposite Brinker International and Fiesta Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Fiesta Restaurant 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 Fiesta Restaurant will offset losses from the drop in Fiesta Restaurant's long position.Brinker International vs. Dennys Corp | Brinker International vs. Bloomin Brands | Brinker International vs. Chuys Holdings | Brinker International vs. Jack In The |
Fiesta Restaurant vs. BJs Restaurants | Fiesta Restaurant vs. Dine Brands Global | Fiesta Restaurant vs. Brinker International | Fiesta Restaurant vs. FAT Brands |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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