Correlation Between Flanigans Enterprises and Spot Coffee

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

By analyzing existing cross correlation between Flanigans Enterprises and Spot Coffee, you can compare the effects of market volatilities on Flanigans Enterprises and Spot Coffee 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 Spot Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Spot Coffee.

Diversification Opportunities for Flanigans Enterprises and Spot Coffee

0.32

Correlation Coefficient

Flanigans Enterprises  Spot Coffee

Weak diversification

The 3 months correlation between Flanigans and Spot is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Spot Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spot Coffee 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 Spot Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spot Coffee has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Spot Coffee go up and down completely randomly.

Pair Corralation between Flanigans Enterprises and Spot Coffee

If you would invest  0.23  in Spot Coffee on February 13, 2025 and sell it today you would earn a total of  0.00  from holding Spot Coffee or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Flanigans Enterprises  vs.  Spot Coffee

Flanigans Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flanigans Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Flanigans Enterprises is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Spot Coffee

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spot Coffee has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Flanigans Enterprises and Spot Coffee

The main advantage of trading using opposite Flanigans Enterprises and Spot Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Spot Coffee 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 Spot Coffee will offset losses from the drop in Spot Coffee's long position.

The idea behind Flanigans Enterprises and Spot Coffee 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.