Correlation Between VARIOUS EATERIES and Starbucks
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES and Starbucks 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 VARIOUS EATERIES and Starbucks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and Starbucks, you can compare the effects of market volatilities on VARIOUS EATERIES and Starbucks 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 VARIOUS EATERIES with a short position of Starbucks. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and Starbucks.
Diversification Opportunities for VARIOUS EATERIES and Starbucks
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between VARIOUS and Starbucks is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and Starbucks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbucks and VARIOUS EATERIES 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 VARIOUS EATERIES LS are associated (or correlated) with Starbucks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbucks has no effect on the direction of VARIOUS EATERIES i.e., VARIOUS EATERIES and Starbucks go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and Starbucks
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the Starbucks. But the stock apears to be less risky and, when comparing its historical volatility, VARIOUS EATERIES LS is 1.61 times less risky than Starbucks. The stock trades about -0.06 of its potential returns per unit of risk. The Starbucks is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,360 in Starbucks on September 19, 2024 and sell it today you would earn a total of 1,560 from holding Starbucks or generate 21.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. Starbucks
Performance |
| Timeline |
| VARIOUS EATERIES |
| Starbucks |
VARIOUS EATERIES and Starbucks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and Starbucks
The main advantage of trading using opposite VARIOUS EATERIES and Starbucks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES position performs unexpectedly, Starbucks 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 Starbucks will offset losses from the drop in Starbucks' long position.| VARIOUS EATERIES vs. Starbucks | VARIOUS EATERIES vs. Superior Plus Corp | VARIOUS EATERIES vs. SIVERS SEMICONDUCTORS AB | VARIOUS EATERIES vs. NorAm Drilling AS |
| Starbucks vs. Grupo Carso SAB | Starbucks vs. Commercial Vehicle Group | Starbucks vs. Cars Inc | Starbucks vs. Carsales |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |