Correlation Between Biglari Holdings and NBCUNIVERSAL

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

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

Diversification Opportunities for Biglari Holdings and NBCUNIVERSAL

0.0

Correlation Coefficient

Biglari Holdings  NBCUNIVERSAL

Pay attention - limited upside

The 3 months correlation between Biglari and NBCUNIVERSAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and NBCUNIVERSAL MEDIA LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBCUNIVERSAL MEDIA LLC 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 NBCUNIVERSAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBCUNIVERSAL MEDIA LLC has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and NBCUNIVERSAL go up and down completely randomly.

Pair Corralation between Biglari Holdings and NBCUNIVERSAL

Allowing for the 90-day total investment horizon Biglari Holdings is expected to under-perform the NBCUNIVERSAL. In addition to that, Biglari Holdings is 1.92 times more volatile than NBCUNIVERSAL MEDIA LLC. It trades about -0.14 of its total potential returns per unit of risk. NBCUNIVERSAL MEDIA LLC is currently generating about 0.03 per unit of volatility. If you would invest  10,154  in NBCUNIVERSAL MEDIA LLC on December 26, 2024 and sell it today you would earn a total of  113.00  from holding NBCUNIVERSAL MEDIA LLC or generate 1.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	58.33%
Values	Daily Returns

Biglari Holdings  vs.  NBCUNIVERSAL MEDIA LLC

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 fragile 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.

NBCUNIVERSAL MEDIA LLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NBCUNIVERSAL MEDIA LLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, NBCUNIVERSAL 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 NBCUNIVERSAL

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

The idea behind Biglari Holdings and NBCUNIVERSAL MEDIA LLC 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.