Correlation Between Biglari Holdings and Element Global

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

By analyzing existing cross correlation between Biglari Holdings and Element Global, you can compare the effects of market volatilities on Biglari Holdings and Element Global 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 Element Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Element Global.

Diversification Opportunities for Biglari Holdings and Element Global

0.0

Correlation Coefficient

Biglari Holdings  Element Global

Pay attention - limited upside

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

Pair Corralation between Biglari Holdings and Element Global

If you would invest  16,849  in Biglari Holdings on December 5, 2024 and sell it today you would earn a total of  5,587  from holding Biglari Holdings or generate 33.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.4%
Values	Daily Returns

Biglari Holdings  vs.  Element Global

Biglari Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Biglari Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Biglari Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Element Global

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Biglari Holdings and Element Global

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

The idea behind Biglari Holdings and Element Global 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.