Correlation Between Dine Brands and Winsome Resources

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

Diversification Opportunities for Dine Brands and Winsome Resources

0.57

Correlation Coefficient

Dine Brands  Winsome Resources

Very weak diversification

The 3 months correlation between Dine and Winsome is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and Winsome Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winsome Resources 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 Winsome Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winsome Resources has no effect on the direction of Dine Brands i.e., Dine Brands and Winsome Resources go up and down completely randomly.

Pair Corralation between Dine Brands and Winsome Resources

Considering the 90-day investment horizon Dine Brands Global is expected to generate 0.42 times more return on investment than Winsome Resources. However, Dine Brands Global is 2.36 times less risky than Winsome Resources. It trades about -0.09 of its potential returns per unit of risk. Winsome Resources Limited is currently generating about -0.07 per unit of risk. If you would invest  2,979  in Dine Brands Global on December 28, 2024 and sell it today you would lose (492.00) from holding Dine Brands Global or give up 16.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

Dine Brands Global  vs.  Winsome Resources Limited

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 unfluctuating performance in the last few months, the Stock's forward 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.

Winsome Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Winsome Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Dine Brands and Winsome Resources

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

The idea behind Dine Brands Global and Winsome Resources Limited 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.