Correlation Between Trio Petroleum and Dine Brands

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

Diversification Opportunities for Trio Petroleum and Dine Brands

-0.54
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Trio and Dine is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Trio Petroleum Corp 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 Trio Petroleum 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 Trio Petroleum Corp 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 Trio Petroleum i.e., Trio Petroleum and Dine Brands go up and down completely randomly.

Pair Corralation between Trio Petroleum and Dine Brands

Given the investment horizon of 90 days Trio Petroleum Corp is expected to under-perform the Dine Brands. In addition to that, Trio Petroleum is 1.78 times more volatile than Dine Brands Global. It trades about -0.33 of its total potential returns per unit of risk. Dine Brands Global is currently generating about 0.04 per unit of volatility. If you would invest  2,955  in Dine Brands Global on September 18, 2024 and sell it today you would earn a total of  188.00  from holding Dine Brands Global or generate 6.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Trio Petroleum Corp  vs.  Dine Brands Global

 Performance 
       Timeline  
Trio Petroleum Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Trio Petroleum Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Dine Brands Global 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Dine Brands Global are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Dine Brands may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Trio Petroleum and Dine Brands Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Trio Petroleum and Dine Brands

The main advantage of trading using opposite Trio Petroleum and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trio Petroleum 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 Trio Petroleum Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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