Correlation Between Jack In and Wingstop

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

By analyzing existing cross correlation between Jack In The and Wingstop, you can compare the effects of market volatilities on Jack In and Wingstop 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 Jack In with a short position of Wingstop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack In and Wingstop.

Diversification Opportunities for Jack In and Wingstop

0.81

Correlation Coefficient

Jack In  Wingstop

Very poor diversification

The 3 months correlation between Jack and Wingstop is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Jack In The and Wingstop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wingstop and Jack In 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 Jack In The are associated (or correlated) with Wingstop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wingstop has no effect on the direction of Jack In i.e., Jack In and Wingstop go up and down completely randomly.

Pair Corralation between Jack In and Wingstop

Given the investment horizon of 90 days Jack In The is expected to under-perform the Wingstop. In addition to that, Jack In is 1.09 times more volatile than Wingstop. It trades about -0.16 of its total potential returns per unit of risk. Wingstop is currently generating about -0.1 per unit of volatility. If you would invest  28,680  in Wingstop on December 29, 2024 and sell it today you would lose (5,751) from holding Wingstop or give up 20.05% of portfolio value over 90 days.

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

Jack In The  vs.  Wingstop

Jack In

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jack In The has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Wingstop

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wingstop has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic 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 Jack In and Wingstop

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

The idea behind Jack In The and Wingstop 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.