Correlation Between Brinker International and Blue Owl

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

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

Diversification Opportunities for Brinker International and Blue Owl

0.4

Correlation Coefficient

Brinker International  Blue Owl

Very weak diversification

The 3 months correlation between Brinker and Blue is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and Blue Owl Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Owl Capital 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 Blue Owl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Owl Capital has no effect on the direction of Brinker International i.e., Brinker International and Blue Owl go up and down completely randomly.

Pair Corralation between Brinker International and Blue Owl

Considering the 90-day investment horizon Brinker International is expected to generate 2.46 times more return on investment than Blue Owl. However, Brinker International is 2.46 times more volatile than Blue Owl Capital. It trades about 0.05 of its potential returns per unit of risk. Blue Owl Capital is currently generating about -0.39 per unit of risk. If you would invest  15,182  in Brinker International on November 28, 2024 and sell it today you would earn a total of  401.00  from holding Brinker International or generate 2.64% 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.  Blue Owl Capital

Brinker International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brinker International are ranked lower than 7 (%) 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.

Blue Owl Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blue Owl Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Brinker International and Blue Owl

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

The idea behind Brinker International and Blue Owl Capital 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.