Correlation Between Autogrill SpA and Biglari Holdings

Can any of the company-specific risk be diversified away by investing in both Autogrill SpA and Biglari Holdings 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 Autogrill SpA and Biglari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Autogrill SpA ADR and Biglari Holdings, you can compare the effects of market volatilities on Autogrill SpA and Biglari Holdings 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 Autogrill SpA with a short position of Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autogrill SpA and Biglari Holdings.

Diversification Opportunities for Autogrill SpA and Biglari Holdings

0.0

Correlation Coefficient

Autogrill SpA  Biglari Holdings

Pay attention - limited upside

The 3 months correlation between Autogrill and Biglari is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Autogrill SpA ADR and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and Autogrill SpA 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 Autogrill SpA ADR are associated (or correlated) with Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Autogrill SpA i.e., Autogrill SpA and Biglari Holdings go up and down completely randomly.

Pair Corralation between Autogrill SpA and Biglari Holdings

If you would invest  17,090  in Biglari Holdings on October 23, 2024 and sell it today you would earn a total of  4,744  from holding Biglari Holdings or generate 27.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Autogrill SpA ADR  vs.  Biglari Holdings

Autogrill SpA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autogrill SpA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Autogrill SpA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Biglari Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Biglari Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Biglari Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Autogrill SpA and Biglari Holdings

The main advantage of trading using opposite Autogrill SpA and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autogrill SpA position performs unexpectedly, Biglari Holdings 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.

The idea behind Autogrill SpA ADR and Biglari Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.