Correlation Between Papa Johns and Entain Plc

Can any of the company-specific risk be diversified away by investing in both Papa Johns and Entain Plc 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 Papa Johns and Entain Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Papa Johns International and Entain Plc, you can compare the effects of market volatilities on Papa Johns and Entain Plc 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 Papa Johns with a short position of Entain Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Papa Johns and Entain Plc.

Diversification Opportunities for Papa Johns and Entain Plc

0.45

Correlation Coefficient

Papa Johns  Entain Plc

Very weak diversification

The 3 months correlation between Papa and Entain is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Papa Johns International and Entain Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entain Plc and Papa Johns 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 Papa Johns International are associated (or correlated) with Entain Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entain Plc has no effect on the direction of Papa Johns i.e., Papa Johns and Entain Plc go up and down completely randomly.

Pair Corralation between Papa Johns and Entain Plc

Assuming the 90 days horizon Papa Johns is expected to generate 1.55 times less return on investment than Entain Plc. In addition to that, Papa Johns is 1.24 times more volatile than Entain Plc. It trades about 0.17 of its total potential returns per unit of risk. Entain Plc is currently generating about 0.32 per unit of volatility. If you would invest  684.00  in Entain Plc on April 25, 2025 and sell it today you would earn a total of  467.00  from holding Entain Plc or generate 68.27% return on investment over 90 days.

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

Papa Johns International  vs.  Entain Plc

Papa Johns International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Papa Johns International are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Papa Johns reported solid returns over the last few months and may actually be approaching a breakup point.

Entain Plc

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Entain Plc are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Entain Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Papa Johns and Entain Plc

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

The idea behind Papa Johns International and Entain Plc 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.