Correlation Between CROWN and Flanigans Enterprises

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

By analyzing existing cross correlation between CROWN CASTLE INTL and Flanigans Enterprises, you can compare the effects of market volatilities on CROWN and Flanigans Enterprises 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 CROWN with a short position of Flanigans Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of CROWN and Flanigans Enterprises.

Diversification Opportunities for CROWN and Flanigans Enterprises

0.11

Correlation Coefficient

CROWN  Flanigans Enterprises

Average diversification

The 3 months correlation between CROWN and Flanigans is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CROWN CASTLE INTL and Flanigans Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flanigans Enterprises and CROWN 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 CROWN CASTLE INTL are associated (or correlated) with Flanigans Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flanigans Enterprises has no effect on the direction of CROWN i.e., CROWN and Flanigans Enterprises go up and down completely randomly.

Pair Corralation between CROWN and Flanigans Enterprises

Assuming the 90 days trading horizon CROWN CASTLE INTL is expected to under-perform the Flanigans Enterprises. But the bond apears to be less risky and, when comparing its historical volatility, CROWN CASTLE INTL is 7.66 times less risky than Flanigans Enterprises. The bond trades about -0.09 of its potential returns per unit of risk. The Flanigans Enterprises is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,462  in Flanigans Enterprises on December 25, 2024 and sell it today you would lose (3.00) from holding Flanigans Enterprises or give up 0.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.8%
Values	Daily Returns

CROWN CASTLE INTL  vs.  Flanigans Enterprises

CROWN CASTLE INTL

Risk-Adjusted Performance

Very Weak

Over the last 90 days CROWN CASTLE INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CROWN is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Flanigans Enterprises

Risk-Adjusted Performance

Weak

Over the last 90 days Flanigans Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Flanigans Enterprises is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with CROWN and Flanigans Enterprises

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

The idea behind CROWN CASTLE INTL and Flanigans Enterprises 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.