Correlation Between Chuys Holdings and Compass Group
Can any of the company-specific risk be diversified away by investing in both Chuys Holdings and Compass Group 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 Chuys Holdings and Compass Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuys Holdings and Compass Group PLC, you can compare the effects of market volatilities on Chuys Holdings and Compass Group 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 Chuys Holdings with a short position of Compass Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuys Holdings and Compass Group.
Diversification Opportunities for Chuys Holdings and Compass Group
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chuys and Compass is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Chuys Holdings and Compass Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Group PLC and Chuys Holdings 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 Chuys Holdings are associated (or correlated) with Compass Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Group PLC has no effect on the direction of Chuys Holdings i.e., Chuys Holdings and Compass Group go up and down completely randomly.
Pair Corralation between Chuys Holdings and Compass Group
If you would invest 3,351 in Compass Group PLC on August 30, 2024 and sell it today you would earn a total of 121.00 from holding Compass Group PLC or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Chuys Holdings vs. Compass Group PLC
Performance |
| Timeline |
| Chuys Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
| Compass Group PLC |
Chuys Holdings and Compass Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuys Holdings and Compass Group
The main advantage of trading using opposite Chuys Holdings and Compass Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuys Holdings position performs unexpectedly, Compass Group 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 Compass Group will offset losses from the drop in Compass Group's long position.| Chuys Holdings vs. Brinker International | Chuys Holdings vs. Bloomin Brands | Chuys Holdings vs. FAT Brands | Chuys Holdings vs. Potbelly Co |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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