Correlation Between Oasis Hotel and Biglari Holdings

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Can any of the company-specific risk be diversified away by investing in both Oasis Hotel and Biglari 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 Oasis Hotel and Biglari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oasis Hotel Resort and Biglari Holdings, you can compare the effects of market volatilities on Oasis Hotel and Biglari 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 Oasis Hotel with a short position of Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oasis Hotel and Biglari Holdings.

Diversification Opportunities for Oasis Hotel and Biglari Holdings

OasisBiglariDiversified AwayOasisBiglariDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Oasis and Biglari is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oasis Hotel Resort and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and Oasis Hotel 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 Oasis Hotel Resort are associated (or correlated) with Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Oasis Hotel i.e., Oasis Hotel and Biglari Holdings go up and down completely randomly.

Pair Corralation between Oasis Hotel and Biglari Holdings

If you would invest  17,000  in Biglari Holdings on September 16, 2024 and sell it today you would earn a total of  6,083  from holding Biglari Holdings or generate 35.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Oasis Hotel Resort  vs.  Biglari Holdings

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 0102030
JavaScript chart by amCharts 3.21.15OHTR BH
       Timeline  
Oasis Hotel Resort 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Oasis Hotel Resort has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Oasis Hotel is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.00020.0002050.000210.000215
Biglari Holdings 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Biglari Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Biglari Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec170180190200210220230240

Oasis Hotel and Biglari Holdings Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.020.040.060.08
JavaScript chart by amCharts 3.21.15OHTR BH
       Returns  

Pair Trading with Oasis Hotel and Biglari Holdings

The main advantage of trading using opposite Oasis Hotel and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oasis Hotel position performs unexpectedly, Biglari 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.
The idea behind Oasis Hotel Resort and Biglari 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.
Check out your portfolio center.
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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