Correlation Between Booking Holdings and Wendys
Can any of the company-specific risk be diversified away by investing in both Booking Holdings and Wendys 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 Booking Holdings and Wendys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Booking Holdings and The Wendys Co, you can compare the effects of market volatilities on Booking Holdings and Wendys 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 Booking Holdings with a short position of Wendys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Booking Holdings and Wendys.
Diversification Opportunities for Booking Holdings and Wendys
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Booking and Wendys is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Booking Holdings and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys and Booking Holdings 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 Booking Holdings are associated (or correlated) with Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of Booking Holdings i.e., Booking Holdings and Wendys go up and down completely randomly.
Pair Corralation between Booking Holdings and Wendys
Given the investment horizon of 90 days Booking Holdings is expected to generate 0.99 times more return on investment than Wendys. However, Booking Holdings is 1.01 times less risky than Wendys. It trades about 0.34 of its potential returns per unit of risk. The Wendys Co is currently generating about -0.04 per unit of risk. If you would invest 415,697 in Booking Holdings on March 9, 2025 and sell it today you would earn a total of 145,764 from holding Booking Holdings or generate 35.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Booking Holdings vs. The Wendys Co
Performance |
| Timeline |
| Booking Holdings |
| The Wendys |
Booking Holdings and Wendys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Booking Holdings and Wendys
The main advantage of trading using opposite Booking Holdings and Wendys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booking Holdings position performs unexpectedly, Wendys 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 Wendys will offset losses from the drop in Wendys' long position.| Booking Holdings vs. TripAdvisor | Booking Holdings vs. Airbnb Inc | Booking Holdings vs. Royal Caribbean Cruises | Booking Holdings vs. Norwegian Cruise Line |
| Wendys vs. Yum Brands | Wendys vs. Dominos Pizza Common | Wendys vs. Darden Restaurants | Wendys vs. Papa Johns International |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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