Correlation Between Brinker International and Gan

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

By analyzing existing cross correlation between Brinker International and Gan, you can compare the effects of market volatilities on Brinker International and Gan 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 Gan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Gan.

Diversification Opportunities for Brinker International and Gan

0.06

Correlation Coefficient

Brinker International  Gan

Significant diversification

The 3 months correlation between Brinker and Gan is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Gan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan 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 Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan has no effect on the direction of Brinker International i.e., Brinker International and Gan go up and down completely randomly.

Pair Corralation between Brinker International and Gan

Considering the 90-day investment horizon Brinker International is expected to generate 3.27 times more return on investment than Gan. However, Brinker International is 3.27 times more volatile than Gan. It trades about 0.08 of its potential returns per unit of risk. Gan is currently generating about -0.02 per unit of risk. If you would invest  13,247  in Brinker International on December 27, 2024 and sell it today you would earn a total of  2,192  from holding Brinker International or generate 16.55% return on investment over 90 days.

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

Brinker International  vs.  Gan

Brinker International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brinker International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Brinker International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Gan is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Brinker International and Gan

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

The idea behind Brinker International and Gan 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.