Correlation Between Interactive Strength and Dine Brands

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

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

Diversification Opportunities for Interactive Strength and Dine Brands

-0.63

Correlation Coefficient

Interactive Strength  Dine Brands

Excellent diversification

The 3 months correlation between Interactive and Dine is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Interactive Strength Common 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 Interactive Strength 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 Interactive Strength Common 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 Interactive Strength i.e., Interactive Strength and Dine Brands go up and down completely randomly.

Pair Corralation between Interactive Strength and Dine Brands

Given the investment horizon of 90 days Interactive Strength Common is expected to under-perform the Dine Brands. In addition to that, Interactive Strength is 4.68 times more volatile than Dine Brands Global. It trades about -0.16 of its total potential returns per unit of risk. Dine Brands Global is currently generating about -0.03 per unit of volatility. If you would invest  4,611  in Dine Brands Global on September 4, 2024 and sell it today you would lose (1,070) from holding Dine Brands Global or give up 23.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Interactive Strength Common  vs.  Dine Brands Global

Interactive Strength

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Interactive Strength Common has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Dine Brands Global

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dine Brands Global are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Dine Brands displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Interactive Strength and Dine Brands

The main advantage of trading using opposite Interactive Strength and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interactive Strength 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 Interactive Strength Common 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 Transaction History module to view history of all your transactions and understand their impact on performance.