Correlation Between ANZNZ and Dennys Corp

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

By analyzing existing cross correlation between ANZNZ 2166 18 FEB 25 and Dennys Corp, you can compare the effects of market volatilities on ANZNZ 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 ANZNZ with a short position of Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANZNZ and Dennys Corp.

Diversification Opportunities for ANZNZ and Dennys Corp

-0.15

Correlation Coefficient

ANZNZ  Dennys Corp

Good diversification

The 3 months correlation between ANZNZ and Dennys is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ANZNZ 2166 18 FEB 25 and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp and ANZNZ 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 ANZNZ 2166 18 FEB 25 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 ANZNZ i.e., ANZNZ and Dennys Corp go up and down completely randomly.

Pair Corralation between ANZNZ and Dennys Corp

Assuming the 90 days trading horizon ANZNZ 2166 18 FEB 25 is expected to generate 0.18 times more return on investment than Dennys Corp. However, ANZNZ 2166 18 FEB 25 is 5.49 times less risky than Dennys Corp. It trades about -0.03 of its potential returns per unit of risk. Dennys Corp is currently generating about -0.05 per unit of risk. If you would invest  9,606  in ANZNZ 2166 18 FEB 25 on October 3, 2024 and sell it today you would lose (188.00) from holding ANZNZ 2166 18 FEB 25 or give up 1.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.45%
Values	Daily Returns

ANZNZ 2166 18 FEB 25  vs.  Dennys Corp

ANZNZ 2166 18

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZNZ 2166 18 FEB 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for ANZNZ 2166 18 FEB 25 investors.

Dennys Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ANZNZ and Dennys Corp

The main advantage of trading using opposite ANZNZ and Dennys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANZNZ 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.

The idea behind ANZNZ 2166 18 FEB 25 and Dennys Corp 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.