Correlation Between Biglari Holdings and Micromobility

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

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

Diversification Opportunities for Biglari Holdings and Micromobility

-0.75

Correlation Coefficient

Biglari Holdings  Micromobility

Pay attention - limited upside

The 3 months correlation between Biglari and Micromobility is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Micromobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micromobility 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 Micromobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micromobility has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Micromobility go up and down completely randomly.

Pair Corralation between Biglari Holdings and Micromobility

If you would invest  17,094  in Biglari Holdings on October 24, 2024 and sell it today you would earn a total of  4,740  from holding Biglari Holdings or generate 27.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.69%
Values	Daily Returns

Biglari Holdings  vs.  Micromobility

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.

Micromobility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micromobility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable primary indicators, Micromobility is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Biglari Holdings and Micromobility

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

The idea behind Biglari Holdings and Micromobility 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.