Correlation Between CAVA Group, and Afentra PLC
Can any of the company-specific risk be diversified away by investing in both CAVA Group, and Afentra PLC 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 Afentra PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAVA Group, and Afentra PLC, you can compare the effects of market volatilities on CAVA Group, and Afentra PLC 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 Afentra PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAVA Group, and Afentra PLC.
Diversification Opportunities for CAVA Group, and Afentra PLC
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CAVA and Afentra is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CAVA Group, and Afentra PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afentra PLC 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 Afentra PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afentra PLC has no effect on the direction of CAVA Group, i.e., CAVA Group, and Afentra PLC go up and down completely randomly.
Pair Corralation between CAVA Group, and Afentra PLC
Given the investment horizon of 90 days CAVA Group, is expected to generate 1.12 times more return on investment than Afentra PLC. However, CAVA Group, is 1.12 times more volatile than Afentra PLC. It trades about 0.16 of its potential returns per unit of risk. Afentra PLC is currently generating about 0.11 per unit of risk. If you would invest 6,494 in CAVA Group, on September 3, 2024 and sell it today you would earn a total of 7,596 from holding CAVA Group, or generate 116.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 33.73% |
| Values | Daily Returns |
CAVA Group, vs. Afentra PLC
Performance |
| Timeline |
| CAVA Group, |
| Afentra PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CAVA Group, and Afentra PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAVA Group, and Afentra PLC
The main advantage of trading using opposite CAVA Group, and Afentra PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAVA Group, position performs unexpectedly, Afentra PLC 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 Afentra PLC will offset losses from the drop in Afentra PLC's long position.| CAVA Group, vs. Dominos Pizza | CAVA Group, vs. United Guardian | CAVA Group, vs. Yum Brands | CAVA Group, vs. Hooker Furniture |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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