Correlation Between Brinker International and BECLE SAB

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

By analyzing existing cross correlation between Brinker International and BECLE SAB DE, you can compare the effects of market volatilities on Brinker International and BECLE SAB 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 Brinker International with a short position of BECLE SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and BECLE SAB.

Diversification Opportunities for Brinker International and BECLE SAB

-0.91

Correlation Coefficient

Brinker International  BECLE SAB

Pay attention - limited upside

The 3 months correlation between Brinker and BECLE is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and BECLE SAB DE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BECLE SAB DE and Brinker International 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 Brinker International are associated (or correlated) with BECLE SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BECLE SAB DE has no effect on the direction of Brinker International i.e., Brinker International and BECLE SAB go up and down completely randomly.

Pair Corralation between Brinker International and BECLE SAB

Assuming the 90 days horizon Brinker International is expected to generate 0.76 times more return on investment than BECLE SAB. However, Brinker International is 1.31 times less risky than BECLE SAB. It trades about 0.11 of its potential returns per unit of risk. BECLE SAB DE is currently generating about 0.01 per unit of risk. If you would invest  3,780  in Brinker International on September 26, 2024 and sell it today you would earn a total of  9,120  from holding Brinker International or generate 241.27% return on investment over 90 days.

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

Brinker International  vs.  BECLE SAB DE

Brinker International

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Brinker International are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Brinker International reported solid returns over the last few months and may actually be approaching a breakup point.

BECLE SAB DE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BECLE SAB DE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Brinker International and BECLE SAB

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

The idea behind Brinker International and BECLE SAB DE 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.