Correlation Between Dine Brands and Chanson International

Can any of the company-specific risk be diversified away by investing in both Dine Brands and Chanson International 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 Chanson International 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 Chanson International Holding, you can compare the effects of market volatilities on Dine Brands and Chanson International 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 Chanson International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and Chanson International.

Diversification Opportunities for Dine Brands and Chanson International

0.53

Correlation Coefficient

Dine Brands  Chanson International

Very weak diversification

The 3 months correlation between Dine and Chanson is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and Chanson International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chanson International 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 Chanson International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chanson International has no effect on the direction of Dine Brands i.e., Dine Brands and Chanson International go up and down completely randomly.

Pair Corralation between Dine Brands and Chanson International

Considering the 90-day investment horizon Dine Brands Global is expected to generate 0.22 times more return on investment than Chanson International. However, Dine Brands Global is 4.62 times less risky than Chanson International. It trades about -0.06 of its potential returns per unit of risk. Chanson International Holding is currently generating about -0.23 per unit of risk. If you would invest  2,898  in Dine Brands Global on December 19, 2024 and sell it today you would lose (365.00) from holding Dine Brands Global or give up 12.59% of portfolio value over 90 days.

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

Dine Brands Global  vs.  Chanson International Holding

Dine Brands Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dine Brands Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Chanson International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chanson International Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Dine Brands and Chanson International

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

The idea behind Dine Brands Global and Chanson International Holding 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.