Correlation Between 83001WAC8 and Dine Brands

Can any of the company-specific risk be diversified away by investing in both 83001WAC8 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 83001WAC8 and Dine Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Six Flags Theme and Dine Brands Global, you can compare the effects of market volatilities on 83001WAC8 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 83001WAC8 with a short position of Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of 83001WAC8 and Dine Brands.

Diversification Opportunities for 83001WAC8 and Dine Brands

0.03

Correlation Coefficient

83001WAC8  Dine Brands

Significant diversification

The 3 months correlation between 83001WAC8 and Dine is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Theme 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 83001WAC8 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 Six Flags Theme 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 83001WAC8 i.e., 83001WAC8 and Dine Brands go up and down completely randomly.

Pair Corralation between 83001WAC8 and Dine Brands

Assuming the 90 days trading horizon Six Flags Theme is expected to generate 22.38 times more return on investment than Dine Brands. However, 83001WAC8 is 22.38 times more volatile than Dine Brands Global. It trades about 0.05 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  10,169  in Six Flags Theme on September 19, 2024 and sell it today you would earn a total of  3.00  from holding Six Flags Theme or generate 0.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	66.53%
Values	Daily Returns

Six Flags Theme  vs.  Dine Brands Global

Six Flags Theme

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Six Flags Theme are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 83001WAC8 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Dine Brands Global

Risk-Adjusted Performance

0 of 100

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 83001WAC8 and Dine Brands

The main advantage of trading using opposite 83001WAC8 and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 83001WAC8 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 Six Flags Theme 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.