Correlation Between Flanigans Enterprises and Chuys Holdings

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

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

Diversification Opportunities for Flanigans Enterprises and Chuys Holdings

-0.11

Correlation Coefficient

Flanigans Enterprises  Chuys Holdings

Good diversification

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

Pair Corralation between Flanigans Enterprises and Chuys Holdings

Considering the 90-day investment horizon Flanigans Enterprises is expected to under-perform the Chuys Holdings. In addition to that, Flanigans Enterprises is 40.53 times more volatile than Chuys Holdings. It trades about -0.06 of its total potential returns per unit of risk. Chuys Holdings is currently generating about 0.36 per unit of volatility. If you would invest  3,736  in Chuys Holdings on September 17, 2024 and sell it today you would earn a total of  12.00  from holding Chuys Holdings or generate 0.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	33.33%
Values	Daily Returns

Flanigans Enterprises  vs.  Chuys Holdings

Flanigans Enterprises

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Flanigans Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Chuys Holdings

Risk-Adjusted Performance

0 of 100

Strong

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

Pair Trading with Flanigans Enterprises and Chuys Holdings

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

The idea behind Flanigans Enterprises and Chuys Holdings 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.