Correlation Between Potbelly and Dennys Corp
Can any of the company-specific risk be diversified away by investing in both Potbelly and Dennys Corp 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 Potbelly and Dennys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Potbelly Co and Dennys Corp, you can compare the effects of market volatilities on Potbelly and Dennys Corp 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 Potbelly with a short position of Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Potbelly and Dennys Corp.
Diversification Opportunities for Potbelly and Dennys Corp
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Potbelly and Dennys is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Potbelly Co and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp and Potbelly 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 Potbelly Co are associated (or correlated) with Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of Potbelly i.e., Potbelly and Dennys Corp go up and down completely randomly.
Pair Corralation between Potbelly and Dennys Corp
Given the investment horizon of 90 days Potbelly Co is expected to generate 0.85 times more return on investment than Dennys Corp. However, Potbelly Co is 1.17 times less risky than Dennys Corp. It trades about 0.11 of its potential returns per unit of risk. Dennys Corp is currently generating about 0.05 per unit of risk. If you would invest 790.00 in Potbelly Co on September 12, 2024 and sell it today you would earn a total of 187.00 from holding Potbelly Co or generate 23.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Potbelly Co vs. Dennys Corp
Performance |
Timeline |
Potbelly |
Dennys Corp |
Potbelly and Dennys Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Potbelly and Dennys Corp
The main advantage of trading using opposite Potbelly and Dennys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Potbelly position performs unexpectedly, Dennys Corp 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 Dennys Corp will offset losses from the drop in Dennys Corp's long position.Potbelly vs. FAT Brands | Potbelly vs. BJs Restaurants | Potbelly vs. One Group Hospitality | Potbelly vs. El Pollo Loco |
Dennys Corp vs. Noble Romans | Dennys Corp vs. Good Times Restaurants | Dennys Corp vs. Flanigans Enterprises | Dennys Corp vs. FAT Brands |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |