Correlation Between Brinker International and GANGLONG CHINA

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

By analyzing existing cross correlation between Brinker International and GANGLONG CHINA PRGRLTD, you can compare the effects of market volatilities on Brinker International and GANGLONG CHINA 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 Brinker International with a short position of GANGLONG CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and GANGLONG CHINA.

Diversification Opportunities for Brinker International and GANGLONG CHINA

-0.71

Correlation Coefficient

Brinker International  GANGLONG CHINA

Pay attention - limited upside

The 3 months correlation between Brinker and GANGLONG is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and GANGLONG CHINA PRGRLTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GANGLONG CHINA PRGRLTD and Brinker International 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 Brinker International are associated (or correlated) with GANGLONG CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GANGLONG CHINA PRGRLTD has no effect on the direction of Brinker International i.e., Brinker International and GANGLONG CHINA go up and down completely randomly.

Pair Corralation between Brinker International and GANGLONG CHINA

Assuming the 90 days horizon Brinker International is expected to generate 0.38 times more return on investment than GANGLONG CHINA. However, Brinker International is 2.6 times less risky than GANGLONG CHINA. It trades about 0.21 of its potential returns per unit of risk. GANGLONG CHINA PRGRLTD is currently generating about -0.25 per unit of risk. If you would invest  12,300  in Brinker International on October 12, 2024 and sell it today you would earn a total of  1,200  from holding Brinker International or generate 9.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

Brinker International  vs.  GANGLONG CHINA PRGRLTD

Brinker International

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brinker International are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Brinker International reported solid returns over the last few months and may actually be approaching a breakup point.

GANGLONG CHINA PRGRLTD

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GANGLONG CHINA PRGRLTD are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, GANGLONG CHINA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brinker International and GANGLONG CHINA

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

The idea behind Brinker International and GANGLONG CHINA PRGRLTD 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.