Correlation Between CAVA Group, and Portillos
Can any of the company-specific risk be diversified away by investing in both CAVA Group, and Portillos 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 Portillos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAVA Group, and Portillos, you can compare the effects of market volatilities on CAVA Group, and Portillos 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 Portillos. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAVA Group, and Portillos.
Diversification Opportunities for CAVA Group, and Portillos
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CAVA and Portillos is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CAVA Group, and Portillos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portillos 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 Portillos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portillos has no effect on the direction of CAVA Group, i.e., CAVA Group, and Portillos go up and down completely randomly.
Pair Corralation between CAVA Group, and Portillos
Given the investment horizon of 90 days CAVA Group, is expected to generate 19.14 times more return on investment than Portillos. However, CAVA Group, is 19.14 times more volatile than Portillos. It trades about 0.06 of its potential returns per unit of risk. Portillos is currently generating about -0.05 per unit of risk. If you would invest 0.00 in CAVA Group, on August 31, 2024 and sell it today you would earn a total of 14,090 from holding CAVA Group, or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.93% |
| Values | Daily Returns |
CAVA Group, vs. Portillos
Performance |
| Timeline |
| CAVA Group, |
| Portillos |
CAVA Group, and Portillos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAVA Group, and Portillos
The main advantage of trading using opposite CAVA Group, and Portillos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAVA Group, position performs unexpectedly, Portillos 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 Portillos will offset losses from the drop in Portillos' long position.| CAVA Group, vs. RLJ Lodging Trust | CAVA Group, vs. Aquagold International | CAVA Group, vs. Stepstone Group | CAVA Group, vs. Morningstar Unconstrained Allocation |
| Portillos vs. RLJ Lodging Trust | Portillos vs. Aquagold International | Portillos vs. Stepstone Group | Portillos vs. Morningstar Unconstrained Allocation |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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