Correlation Between Biglari Holdings and QRTEA Old

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

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

Diversification Opportunities for Biglari Holdings and QRTEA Old

0.24

Correlation Coefficient

Biglari Holdings  QRTEA Old

Modest diversification

The 3 months correlation between Biglari and QRTEA is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and QRTEA Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QRTEA Old 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 QRTEA Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QRTEA Old has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and QRTEA Old go up and down completely randomly.

Pair Corralation between Biglari Holdings and QRTEA Old

If you would invest  36.00  in QRTEA Old on December 29, 2024 and sell it today you would earn a total of  0.00  from holding QRTEA Old or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Biglari Holdings  vs.  QRTEA Old

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 unsteady performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

QRTEA Old

Risk-Adjusted Performance

Modest

Over the last 90 days QRTEA Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak technical and fundamental indicators, QRTEA Old sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biglari Holdings and QRTEA Old

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

The idea behind Biglari Holdings and QRTEA Old 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.