Correlation Between Brinker International and Lottery, Common

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

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

Diversification Opportunities for Brinker International and Lottery, Common

0.46

Correlation Coefficient

Brinker International  Lottery, Common

Very weak diversification

The 3 months correlation between Brinker and Lottery, is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Lottery, Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lottery, Common Stock 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 Lottery, Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lottery, Common Stock has no effect on the direction of Brinker International i.e., Brinker International and Lottery, Common go up and down completely randomly.

Pair Corralation between Brinker International and Lottery, Common

Considering the 90-day investment horizon Brinker International is expected to generate 61.78 times less return on investment than Lottery, Common. But when comparing it to its historical volatility, Brinker International is 11.53 times less risky than Lottery, Common. It trades about 0.05 of its potential returns per unit of risk. Lottery, Common Stock is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Lottery, Common Stock on November 19, 2024 and sell it today you would earn a total of  125.00  from holding Lottery, Common Stock or generate 357.14% return on investment over 90 days.

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

Brinker International  vs.  Lottery, Common Stock

Brinker International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brinker International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Brinker International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lottery, Common Stock

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lottery, Common Stock are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Lottery, Common showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brinker International and Lottery, Common

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

The idea behind Brinker International and Lottery, Common Stock 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .