Correlation Between Brinker International and Air Products
Can any of the company-specific risk be diversified away by investing in both Brinker International and Air Products 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 Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and Air Products and, you can compare the effects of market volatilities on Brinker International and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Air Products.
Diversification Opportunities for Brinker International and Air Products
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brinker and Air is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Brinker International i.e., Brinker International and Air Products go up and down completely randomly.
Pair Corralation between Brinker International and Air Products
Considering the 90-day investment horizon Brinker International is expected to generate 1.56 times more return on investment than Air Products. However, Brinker International is 1.56 times more volatile than Air Products and. It trades about 0.41 of its potential returns per unit of risk. Air Products and is currently generating about 0.13 per unit of risk. If you would invest 6,929 in Brinker International on September 12, 2024 and sell it today you would earn a total of 5,767 from holding Brinker International or generate 83.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Brinker International vs. Air Products and
Performance |
Timeline |
Brinker International |
Air Products |
Brinker International and Air Products Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brinker International and Air Products
The main advantage of trading using opposite Brinker International and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.Brinker International vs. Noble Romans | Brinker International vs. Good Times Restaurants | Brinker International vs. Flanigans Enterprises | Brinker International vs. FAT Brands |
Air Products vs. Griffon | Air Products vs. Merck Company | Air Products vs. Brinker International | Air Products vs. Alcoa Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |