Correlation Between Kura Sushi and New Palace
Can any of the company-specific risk be diversified away by investing in both Kura Sushi and New Palace 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 Kura Sushi and New Palace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kura Sushi Asia and New Palace International, you can compare the effects of market volatilities on Kura Sushi and New Palace 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 Kura Sushi with a short position of New Palace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Sushi and New Palace.
Diversification Opportunities for Kura Sushi and New Palace
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kura and New is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi Asia and New Palace International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Palace International and Kura Sushi 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 Kura Sushi Asia are associated (or correlated) with New Palace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Palace International has no effect on the direction of Kura Sushi i.e., Kura Sushi and New Palace go up and down completely randomly.
Pair Corralation between Kura Sushi and New Palace
Assuming the 90 days trading horizon Kura Sushi Asia is expected to under-perform the New Palace. In addition to that, Kura Sushi is 1.88 times more volatile than New Palace International. It trades about -0.12 of its total potential returns per unit of risk. New Palace International is currently generating about -0.12 per unit of volatility. If you would invest 2,370 in New Palace International on September 2, 2024 and sell it today you would lose (75.00) from holding New Palace International or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kura Sushi Asia vs. New Palace International
Performance |
| Timeline |
| Kura Sushi Asia |
| New Palace International |
Kura Sushi and New Palace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kura Sushi and New Palace
The main advantage of trading using opposite Kura Sushi and New Palace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kura Sushi position performs unexpectedly, New Palace 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 New Palace will offset losses from the drop in New Palace's long position.| Kura Sushi vs. Gourmet Master Co | Kura Sushi vs. Wowprime Corp | Kura Sushi vs. Louisa Professional Coffee | Kura Sushi vs. An Shin Food Services |
| New Palace vs. Chaintech Technology Corp | New Palace vs. Avision | New Palace vs. Clevo Co | New Palace vs. Elitegroup Computer Systems |
Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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