Correlation Between Biglari Holdings and Interactive Strength
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Interactive Strength 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 Interactive Strength into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Interactive Strength Common, you can compare the effects of market volatilities on Biglari Holdings and Interactive Strength 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 Interactive Strength. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Interactive Strength.
Diversification Opportunities for Biglari Holdings and Interactive Strength
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biglari and Interactive is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Interactive Strength Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interactive Strength 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 Interactive Strength. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interactive Strength has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Interactive Strength go up and down completely randomly.
Pair Corralation between Biglari Holdings and Interactive Strength
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.36 times more return on investment than Interactive Strength. However, Biglari Holdings is 2.8 times less risky than Interactive Strength. It trades about 0.11 of its potential returns per unit of risk. Interactive Strength Common is currently generating about -0.21 per unit of risk. If you would invest 21,061 in Biglari Holdings on November 20, 2024 and sell it today you would earn a total of 3,122 from holding Biglari Holdings or generate 14.82% 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. Interactive Strength Common
Performance |
Timeline |
Biglari Holdings |
Interactive Strength |
Biglari Holdings and Interactive Strength Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Biglari Holdings and Interactive Strength
The main advantage of trading using opposite Biglari Holdings and Interactive Strength positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Interactive Strength 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 Interactive Strength will offset losses from the drop in Interactive Strength's long position.Biglari Holdings vs. Cannae Holdings | ||
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Check out your portfolio center.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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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