Correlation Between Biglari Holdings and Hamilton Lane

Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Hamilton Lane 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 Biglari Holdings and Hamilton Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Biglari Holdings and Hamilton Lane, you can compare the effects of market volatilities on Biglari Holdings and Hamilton Lane 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 Biglari Holdings with a short position of Hamilton Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Hamilton Lane.

Diversification Opportunities for Biglari Holdings and Hamilton Lane

-0.41

Correlation Coefficient

Biglari Holdings  Hamilton Lane

Very good diversification

The 3 months correlation between Biglari and Hamilton is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Hamilton Lane in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Lane and Biglari Holdings 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 Biglari Holdings are associated (or correlated) with Hamilton Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Lane has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Hamilton Lane go up and down completely randomly.

Pair Corralation between Biglari Holdings and Hamilton Lane

Given the investment horizon of 90 days Biglari Holdings is expected to generate 0.73 times more return on investment than Hamilton Lane. However, Biglari Holdings is 1.37 times less risky than Hamilton Lane. It trades about 0.18 of its potential returns per unit of risk. Hamilton Lane is currently generating about -0.02 per unit of risk. If you would invest  118,250  in Biglari Holdings on May 7, 2025 and sell it today you would earn a total of  26,010  from holding Biglari Holdings or generate 22.0% return on investment over 90 days.

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

Biglari Holdings  vs.  Hamilton Lane

Biglari Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Biglari Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Biglari Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Hamilton Lane

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hamilton Lane has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Hamilton Lane is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Biglari Holdings and Hamilton Lane

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

The idea behind Biglari Holdings and Hamilton Lane 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.