Correlation Between FAT Brands and Dennys Corp
Can any of the company-specific risk be diversified away by investing in both FAT Brands and Dennys Corp 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 FAT Brands and Dennys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAT Brands and Dennys Corp, you can compare the effects of market volatilities on FAT Brands and Dennys Corp 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 FAT Brands with a short position of Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAT Brands and Dennys Corp.
Diversification Opportunities for FAT Brands and Dennys Corp
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FAT and Dennys is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding FAT Brands and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp and FAT Brands 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 FAT Brands are associated (or correlated) with Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of FAT Brands i.e., FAT Brands and Dennys Corp go up and down completely randomly.
Pair Corralation between FAT Brands and Dennys Corp
Assuming the 90 days horizon FAT Brands is expected to under-perform the Dennys Corp. In addition to that, FAT Brands is 1.27 times more volatile than Dennys Corp. It trades about -0.01 of its total potential returns per unit of risk. Dennys Corp is currently generating about 0.05 per unit of volatility. If you would invest 391.00 in Dennys Corp on March 13, 2025 and sell it today you would earn a total of 35.00 from holding Dennys Corp or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAT Brands vs. Dennys Corp
Performance |
| Timeline |
| FAT Brands |
| Dennys Corp |
FAT Brands and Dennys Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAT Brands and Dennys Corp
The main advantage of trading using opposite FAT Brands and Dennys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAT Brands position performs unexpectedly, Dennys Corp 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 Dennys Corp will offset losses from the drop in Dennys Corp's long position.| FAT Brands vs. FAT Brands | FAT Brands vs. Brinker International | FAT Brands vs. Jack In The | FAT Brands vs. Potbelly Co |
| Dennys Corp vs. Brinker International | Dennys Corp vs. Bloomin Brands | Dennys Corp vs. Jack In The | Dennys Corp vs. BJs Restaurants |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |