Correlation Between Flanigans Enterprises and Brinker International

Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Brinker International 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 Brinker International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Flanigans Enterprises and Brinker International, you can compare the effects of market volatilities on Flanigans Enterprises and Brinker International 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 Brinker International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Brinker International.

Diversification Opportunities for Flanigans Enterprises and Brinker International

-0.73

Correlation Coefficient

Flanigans Enterprises  Brinker International

Pay attention - limited upside

The 3 months correlation between Flanigans and Brinker is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Brinker International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinker International 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 Brinker International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinker International has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Brinker International go up and down completely randomly.

Pair Corralation between Flanigans Enterprises and Brinker International

Considering the 90-day investment horizon Flanigans Enterprises is expected to generate 22.25 times more return on investment than Brinker International. However, Flanigans Enterprises is 22.25 times more volatile than Brinker International. It trades about 0.05 of its potential returns per unit of risk. Brinker International is currently generating about 0.15 per unit of risk. If you would invest  3,063  in Flanigans Enterprises on September 12, 2024 and sell it today you would lose (563.00) from holding Flanigans Enterprises or give up 18.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Flanigans Enterprises  vs.  Brinker International

Flanigans Enterprises

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Flanigans Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Flanigans Enterprises is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Brinker International

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Brinker International are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Brinker International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flanigans Enterprises and Brinker International

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

The idea behind Flanigans Enterprises and Brinker International 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..