Correlation Between Carrols Restaurant and Auburn National

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

By analyzing existing cross correlation between Carrols Restaurant Group and Auburn National Bancorporation, you can compare the effects of market volatilities on Carrols Restaurant and Auburn National 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 Carrols Restaurant with a short position of Auburn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carrols Restaurant and Auburn National.

Diversification Opportunities for Carrols Restaurant and Auburn National

0.01

Correlation Coefficient

Carrols Restaurant  Auburn National

Significant diversification

The 3 months correlation between Carrols and Auburn is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Carrols Restaurant Group and Auburn National Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auburn National Banc and Carrols Restaurant 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 Carrols Restaurant Group are associated (or correlated) with Auburn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auburn National Banc has no effect on the direction of Carrols Restaurant i.e., Carrols Restaurant and Auburn National go up and down completely randomly.

Pair Corralation between Carrols Restaurant and Auburn National

If you would invest  2,155  in Auburn National Bancorporation on September 20, 2024 and sell it today you would earn a total of  69.00  from holding Auburn National Bancorporation or generate 3.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Carrols Restaurant Group  vs.  Auburn National Bancorp.

Carrols Restaurant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carrols Restaurant Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Carrols Restaurant is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Auburn National Banc

Risk-Adjusted Performance

2 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Auburn National Bancorporation are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Auburn National is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Carrols Restaurant and Auburn National

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

The idea behind Carrols Restaurant Group and Auburn National Bancorporation 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.