Correlation Between Boston Pizza and Restaurant Brands

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

By analyzing existing cross correlation between Boston Pizza Royalties and Restaurant Brands International, you can compare the effects of market volatilities on Boston Pizza and Restaurant 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 Boston Pizza with a short position of Restaurant Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Pizza and Restaurant Brands.

Diversification Opportunities for Boston Pizza and Restaurant Brands

0.39

Correlation Coefficient

Boston Pizza  Restaurant Brands

Weak diversification

The 3 months correlation between Boston and Restaurant is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Boston Pizza Royalties and Restaurant Brands Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Restaurant Brands and Boston Pizza 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 Boston Pizza Royalties are associated (or correlated) with Restaurant Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Restaurant Brands has no effect on the direction of Boston Pizza i.e., Boston Pizza and Restaurant Brands go up and down completely randomly.

Pair Corralation between Boston Pizza and Restaurant Brands

Assuming the 90 days trading horizon Boston Pizza Royalties is expected to generate 0.42 times more return on investment than Restaurant Brands. However, Boston Pizza Royalties is 2.37 times less risky than Restaurant Brands. It trades about 0.45 of its potential returns per unit of risk. Restaurant Brands International is currently generating about 0.13 per unit of risk. If you would invest  1,704  in Boston Pizza Royalties on April 22, 2025 and sell it today you would earn a total of  294.00  from holding Boston Pizza Royalties or generate 17.25% return on investment over 90 days.

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

Boston Pizza Royalties  vs.  Restaurant Brands Internationa

Boston Pizza Royalties

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Pizza Royalties are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Boston Pizza sustained solid returns over the last few months and may actually be approaching a breakup point.

Restaurant Brands

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Restaurant Brands International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Restaurant Brands may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Boston Pizza and Restaurant Brands

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

The idea behind Boston Pizza Royalties and Restaurant Brands International 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .