Correlation Between Sligro Food and Dine Brands

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

By analyzing existing cross correlation between Sligro Food Group and Dine Brands Global, you can compare the effects of market volatilities on Sligro Food and Dine 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 Sligro Food with a short position of Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Dine Brands.

Diversification Opportunities for Sligro Food and Dine Brands

-0.12

Correlation Coefficient

Sligro Food  Dine Brands

Good diversification

The 3 months correlation between Sligro and Dine is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global and Sligro Food 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 Sligro Food Group are associated (or correlated) with Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Sligro Food i.e., Sligro Food and Dine Brands go up and down completely randomly.

Pair Corralation between Sligro Food and Dine Brands

Assuming the 90 days horizon Sligro Food Group is expected to generate 0.61 times more return on investment than Dine Brands. However, Sligro Food Group is 1.65 times less risky than Dine Brands. It trades about -0.07 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.05 per unit of risk. If you would invest  1,705  in Sligro Food Group on October 3, 2024 and sell it today you would lose (505.00) from holding Sligro Food Group or give up 29.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.26%
Values	Daily Returns

Sligro Food Group  vs.  Dine Brands Global

Sligro Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sligro Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Dine Brands Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dine Brands Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Dine Brands is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sligro Food and Dine Brands

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

The idea behind Sligro Food Group and Dine Brands Global 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.