Correlation Between Wendys and Dunkin Brands
Can any of the company-specific risk be diversified away by investing in both Wendys and Dunkin 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 Wendys and Dunkin Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Wendys Co and Dunkin Brands Group, you can compare the effects of market volatilities on Wendys and Dunkin 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 Wendys with a short position of Dunkin Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wendys and Dunkin Brands.
Diversification Opportunities for Wendys and Dunkin Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wendys and Dunkin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Wendys Co and Dunkin Brands Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunkin Brands Group and Wendys 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 The Wendys Co are associated (or correlated) with Dunkin Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunkin Brands Group has no effect on the direction of Wendys i.e., Wendys and Dunkin Brands go up and down completely randomly.
Pair Corralation between Wendys and Dunkin Brands
If you would invest 1,826 in The Wendys Co on January 24, 2024 and sell it today you would earn a total of 145.00 from holding The Wendys Co or generate 7.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
The Wendys Co vs. Dunkin Brands Group
Performance |
Timeline |
The Wendys |
Dunkin Brands Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wendys and Dunkin Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wendys and Dunkin Brands
The main advantage of trading using opposite Wendys and Dunkin Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendys position performs unexpectedly, Dunkin 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 Dunkin Brands will offset losses from the drop in Dunkin Brands' long position.Wendys vs. Yum Brands | Wendys vs. Dominos Pizza | Wendys vs. Darden Restaurants | Wendys vs. Papa Johns International |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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