Correlation Between Keg Royalties and Restaurant Brands
Can any of the company-specific risk be diversified away by investing in both Keg Royalties and Restaurant Brands 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 Keg Royalties and Restaurant Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Keg Royalties and Restaurant Brands International, you can compare the effects of market volatilities on Keg Royalties and Restaurant Brands 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 Keg Royalties with a short position of Restaurant Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keg Royalties and Restaurant Brands.
Diversification Opportunities for Keg Royalties and Restaurant Brands
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Keg and Restaurant is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding The Keg Royalties and Restaurant Brands Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Restaurant Brands and Keg Royalties 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 The Keg Royalties are associated (or correlated) with Restaurant Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Restaurant Brands has no effect on the direction of Keg Royalties i.e., Keg Royalties and Restaurant Brands go up and down completely randomly.
Pair Corralation between Keg Royalties and Restaurant Brands
Assuming the 90 days trading horizon Keg Royalties is expected to generate 1.34 times less return on investment than Restaurant Brands. But when comparing it to its historical volatility, The Keg Royalties is 1.53 times less risky than Restaurant Brands. It trades about 0.09 of its potential returns per unit of risk. Restaurant Brands International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9,219 in Restaurant Brands International on September 3, 2024 and sell it today you would earn a total of 532.00 from holding Restaurant Brands International or generate 5.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
The Keg Royalties vs. Restaurant Brands Internationa
Performance |
Timeline |
Keg Royalties |
Restaurant Brands |
Keg Royalties and Restaurant Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Keg Royalties and Restaurant Brands
The main advantage of trading using opposite Keg Royalties and Restaurant Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keg Royalties position performs unexpectedly, Restaurant Brands 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 Restaurant Brands will offset losses from the drop in Restaurant Brands' long position.Keg Royalties vs. Boston Pizza Royalties | Keg Royalties vs. SIR Royalty Income | Keg Royalties vs. Pizza Pizza Royalty | Keg Royalties vs. Chemtrade Logistics Income |
Restaurant Brands vs. Canadian Tire | Restaurant Brands vs. Dollarama | Restaurant Brands vs. Nutrien | Restaurant Brands vs. Magna International |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |