Correlation Between Flanigans Enterprises and Dine Brands

Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises 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 Flanigans Enterprises and Dine Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Flanigans Enterprises and Dine Brands Global, you can compare the effects of market volatilities on Flanigans Enterprises 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 Flanigans Enterprises with a short position of Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Dine Brands.

Diversification Opportunities for Flanigans Enterprises and Dine Brands

-0.66

Correlation Coefficient

Flanigans Enterprises  Dine Brands

Excellent diversification

The 3 months correlation between Flanigans and Dine is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises 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 Flanigans Enterprises 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 Flanigans Enterprises 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 Flanigans Enterprises i.e., Flanigans Enterprises and Dine Brands go up and down completely randomly.

Pair Corralation between Flanigans Enterprises and Dine Brands

Considering the 90-day investment horizon Flanigans Enterprises is expected to generate 1.36 times more return on investment than Dine Brands. However, Flanigans Enterprises is 1.36 times more volatile than Dine Brands Global. It trades about 0.2 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.31 per unit of risk. If you would invest  2,560  in Flanigans Enterprises on February 23, 2024 and sell it today you would earn a total of  230.00  from holding Flanigans Enterprises or generate 8.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	82.61%
Values	Daily Returns

Flanigans Enterprises  vs.  Dine Brands Global

Flanigans Enterprises

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flanigans Enterprises are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile fundamental indicators, Flanigans Enterprises disclosed solid returns over the last few months and may actually be approaching a breakup point.

Dine Brands Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dine Brands Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Flanigans Enterprises and Dine Brands

The main advantage of trading using opposite Flanigans Enterprises and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises 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 Flanigans Enterprises 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.