Correlation Between Biglari Holdings and Learning Tree

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

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

Diversification Opportunities for Biglari Holdings and Learning Tree

0.0

Correlation Coefficient

Biglari Holdings  Learning Tree

Pay attention - limited upside

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

Pair Corralation between Biglari Holdings and Learning Tree

If you would invest  0.00  in Learning Tree International on December 20, 2024 and sell it today you would earn a total of  0.00  from holding Learning Tree International or generate 0.0% return on investment over 90 days.

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

Biglari Holdings  vs.  Learning Tree International

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 latest unsteady performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Learning Tree Intern

Risk-Adjusted Performance

Very Weak

Over the last 90 days Learning Tree International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Learning Tree is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Biglari Holdings and Learning Tree

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

The idea behind Biglari Holdings and Learning Tree 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..