Correlation Between Biglari Holdings and Sacks Parente

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

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

Diversification Opportunities for Biglari Holdings and Sacks Parente

-0.51

Correlation Coefficient

Biglari Holdings  Sacks Parente

Excellent diversification

The 3 months correlation between Biglari and Sacks is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Sacks Parente Golf, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sacks Parente Golf, 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 Sacks Parente. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sacks Parente Golf, has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Sacks Parente go up and down completely randomly.

Pair Corralation between Biglari Holdings and Sacks Parente

Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.27 times more return on investment than Sacks Parente. However, Biglari Holdings is 3.7 times less risky than Sacks Parente. It trades about 0.18 of its potential returns per unit of risk. Sacks Parente Golf, is currently generating about -0.05 per unit of risk. If you would invest  17,201  in Biglari Holdings on September 3, 2024 and sell it today you would earn a total of  4,403  from holding Biglari Holdings or generate 25.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Biglari Holdings  vs.  Sacks Parente Golf,

Biglari Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Biglari Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical indicators, Biglari Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Sacks Parente Golf,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sacks Parente Golf, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Biglari Holdings and Sacks Parente

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

The idea behind Biglari Holdings and Sacks Parente Golf, 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.