Correlation Between Red Robin and Jack In

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

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

Diversification Opportunities for Red Robin and Jack In

0.27

Correlation Coefficient

Red Robin  Jack In

Modest diversification

The 3 months correlation between Red and Jack is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Red Robin Gourmet and Jack In The in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jack In and Red Robin 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 Red Robin Gourmet are associated (or correlated) with Jack In. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jack In has no effect on the direction of Red Robin i.e., Red Robin and Jack In go up and down completely randomly.

Pair Corralation between Red Robin and Jack In

Given the investment horizon of 90 days Red Robin Gourmet is expected to generate 1.33 times more return on investment than Jack In. However, Red Robin is 1.33 times more volatile than Jack In The. It trades about 0.1 of its potential returns per unit of risk. Jack In The is currently generating about -0.12 per unit of risk. If you would invest  530.00  in Red Robin Gourmet on October 9, 2024 and sell it today you would earn a total of  61.00  from holding Red Robin Gourmet or generate 11.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.5%
Values	Daily Returns

Red Robin Gourmet  vs.  Jack In The

Red Robin Gourmet

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Red Robin Gourmet are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Red Robin sustained solid returns over the last few months and may actually be approaching a breakup point.

Jack In

Risk-Adjusted Performance

0 of 100

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 quite persistent fundamental indicators, Jack In is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Red Robin and Jack In

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

The idea behind Red Robin Gourmet and Jack In The 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.