Correlation Between Dine Brands and American Healthcare

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

By analyzing existing cross correlation between Dine Brands Global and American Healthcare REIT,, you can compare the effects of market volatilities on Dine Brands and American Healthcare 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 Dine Brands with a short position of American Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and American Healthcare.

Diversification Opportunities for Dine Brands and American Healthcare

0.22

Correlation Coefficient

Dine Brands  American Healthcare

Modest diversification

The 3 months correlation between Dine and American is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and American Healthcare REIT, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Healthcare REIT, and Dine Brands 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 Dine Brands Global are associated (or correlated) with American Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Healthcare REIT, has no effect on the direction of Dine Brands i.e., Dine Brands and American Healthcare go up and down completely randomly.

Pair Corralation between Dine Brands and American Healthcare

Considering the 90-day investment horizon Dine Brands Global is expected to under-perform the American Healthcare. In addition to that, Dine Brands is 1.35 times more volatile than American Healthcare REIT,. It trades about -0.15 of its total potential returns per unit of risk. American Healthcare REIT, is currently generating about 0.18 per unit of volatility. If you would invest  2,493  in American Healthcare REIT, on October 7, 2024 and sell it today you would earn a total of  324.00  from holding American Healthcare REIT, or generate 13.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Dine Brands Global  vs.  American Healthcare REIT,

Dine Brands Global

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dine Brands Global are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Dine Brands is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

American Healthcare REIT,

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Healthcare REIT, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical indicators, American Healthcare reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dine Brands and American Healthcare

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

The idea behind Dine Brands Global and American Healthcare REIT, 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.