Correlation Between CAVA Group, and CIMG
Can any of the company-specific risk be diversified away by investing in both CAVA Group, and CIMG 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 CAVA Group, and CIMG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAVA Group, and CIMG Inc, you can compare the effects of market volatilities on CAVA Group, and CIMG 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 CAVA Group, with a short position of CIMG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAVA Group, and CIMG.
Diversification Opportunities for CAVA Group, and CIMG
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CAVA and CIMG is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding CAVA Group, and CIMG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMG Inc and CAVA Group, 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 CAVA Group, are associated (or correlated) with CIMG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMG Inc has no effect on the direction of CAVA Group, i.e., CAVA Group, and CIMG go up and down completely randomly.
Pair Corralation between CAVA Group, and CIMG
Given the investment horizon of 90 days CAVA Group, is expected to generate 3.39 times less return on investment than CIMG. But when comparing it to its historical volatility, CAVA Group, is 11.61 times less risky than CIMG. It trades about 0.19 of its potential returns per unit of risk. CIMG Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 263.00 in CIMG Inc on September 2, 2024 and sell it today you would lose (178.00) from holding CIMG Inc or give up 67.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAVA Group, vs. CIMG Inc
Performance |
| Timeline |
| CAVA Group, |
| CIMG Inc |
CAVA Group, and CIMG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAVA Group, and CIMG
The main advantage of trading using opposite CAVA Group, and CIMG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAVA Group, position performs unexpectedly, CIMG 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 CIMG will offset losses from the drop in CIMG's long position.| CAVA Group, vs. Tarsus Pharmaceuticals | CAVA Group, vs. Lipocine | CAVA Group, vs. Ardelyx | CAVA Group, vs. Asure Software |
| CIMG vs. Borealis Foods | CIMG vs. Above Food Ingredients | CIMG vs. Nocera Inc | CIMG vs. Oriental Rise Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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