Correlation Between Biglari Holdings and 26442CAB0

Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and 26442CAB0 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 26442CAB0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Biglari Holdings and DUKE ENERGY CAROLINAS, you can compare the effects of market volatilities on Biglari Holdings and 26442CAB0 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 26442CAB0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and 26442CAB0.

Diversification Opportunities for Biglari Holdings and 26442CAB0

-0.76

Correlation Coefficient

Biglari Holdings  26442CAB0

Pay attention - limited upside

The 3 months correlation between Biglari and 26442CAB0 is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and DUKE ENERGY CAROLINAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY CAROLINAS 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 26442CAB0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY CAROLINAS has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and 26442CAB0 go up and down completely randomly.

Pair Corralation between Biglari Holdings and 26442CAB0

Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 2.36 times more return on investment than 26442CAB0. However, Biglari Holdings is 2.36 times more volatile than DUKE ENERGY CAROLINAS. It trades about 0.27 of its potential returns per unit of risk. DUKE ENERGY CAROLINAS is currently generating about -0.08 per unit of risk. If you would invest  16,809  in Biglari Holdings on October 8, 2024 and sell it today you would earn a total of  8,967  from holding Biglari Holdings or generate 53.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	82.26%
Values	Daily Returns

Biglari Holdings  vs.  DUKE ENERGY CAROLINAS

Biglari Holdings

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Biglari Holdings are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical indicators, Biglari Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE ENERGY CAROLINAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26442CAB0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Biglari Holdings and 26442CAB0

The main advantage of trading using opposite Biglari Holdings and 26442CAB0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, 26442CAB0 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 26442CAB0 will offset losses from the drop in 26442CAB0's long position.

The idea behind Biglari Holdings and DUKE ENERGY CAROLINAS 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.