Correlation Between Dine Brands and RBACN

Can any of the company-specific risk be diversified away by investing in both Dine Brands and RBACN 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 RBACN 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 RBACN 675 15 MAR 28, you can compare the effects of market volatilities on Dine Brands and RBACN 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 RBACN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and RBACN.

Diversification Opportunities for Dine Brands and RBACN

0.2

Correlation Coefficient

Dine Brands  RBACN

Modest diversification

The 3 months correlation between Dine and RBACN is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and RBACN 675 15 MAR 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBACN 675 15 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 RBACN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBACN 675 15 has no effect on the direction of Dine Brands i.e., Dine Brands and RBACN go up and down completely randomly.

Pair Corralation between Dine Brands and RBACN

Considering the 90-day investment horizon Dine Brands Global is expected to under-perform the RBACN. In addition to that, Dine Brands is 5.54 times more volatile than RBACN 675 15 MAR 28. It trades about -0.27 of its total potential returns per unit of risk. RBACN 675 15 MAR 28 is currently generating about -0.31 per unit of volatility. If you would invest  10,293  in RBACN 675 15 MAR 28 on September 28, 2024 and sell it today you would lose (243.00) from holding RBACN 675 15 MAR 28 or give up 2.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Dine Brands Global  vs.  RBACN 675 15 MAR 28

Dine Brands Global

Risk-Adjusted Performance

1 of 100

Very 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.

RBACN 675 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RBACN 675 15 MAR 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, RBACN is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dine Brands and RBACN

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

The idea behind Dine Brands Global and RBACN 675 15 MAR 28 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.