Correlation Between Biglari Holdings and CROWN

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

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

Diversification Opportunities for Biglari Holdings and CROWN

-0.05

Correlation Coefficient

Biglari Holdings  CROWN

Good diversification

The 3 months correlation between Biglari and CROWN is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and CROWN CASTLE INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CROWN CASTLE INTERNA 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 CROWN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CROWN CASTLE INTERNA has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and CROWN go up and down completely randomly.

Pair Corralation between Biglari Holdings and CROWN

Allowing for the 90-day total investment horizon Biglari Holdings is expected to under-perform the CROWN. In addition to that, Biglari Holdings is 2.28 times more volatile than CROWN CASTLE INTERNATIONAL. It trades about -0.33 of its total potential returns per unit of risk. CROWN CASTLE INTERNATIONAL is currently generating about -0.01 per unit of volatility. If you would invest  9,415  in CROWN CASTLE INTERNATIONAL on October 22, 2024 and sell it today you would lose (22.00) from holding CROWN CASTLE INTERNATIONAL or give up 0.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

Biglari Holdings  vs.  CROWN CASTLE INTERNATIONAL

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 unsteady technical indicators, Biglari Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

CROWN CASTLE INTERNA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CROWN CASTLE INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CROWN is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Biglari Holdings and CROWN

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

The idea behind Biglari Holdings and CROWN CASTLE 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.