Correlation Between Cumberland Pharmaceuticals and Kura Sushi
Can any of the company-specific risk be diversified away by investing in both Cumberland Pharmaceuticals and Kura Sushi 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 Cumberland Pharmaceuticals and Kura Sushi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cumberland Pharmaceuticals and Kura Sushi USA, you can compare the effects of market volatilities on Cumberland Pharmaceuticals and Kura Sushi 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 Cumberland Pharmaceuticals with a short position of Kura Sushi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumberland Pharmaceuticals and Kura Sushi.
Diversification Opportunities for Cumberland Pharmaceuticals and Kura Sushi
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cumberland and Kura is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cumberland Pharmaceuticals and Kura Sushi USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kura Sushi USA and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals are associated (or correlated) with Kura Sushi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kura Sushi USA has no effect on the direction of Cumberland Pharmaceuticals i.e., Cumberland Pharmaceuticals and Kura Sushi go up and down completely randomly.
Pair Corralation between Cumberland Pharmaceuticals and Kura Sushi
Given the investment horizon of 90 days Cumberland Pharmaceuticals is expected to under-perform the Kura Sushi. But the stock apears to be less risky and, when comparing its historical volatility, Cumberland Pharmaceuticals is 1.12 times less risky than Kura Sushi. The stock trades about -0.02 of its potential returns per unit of risk. The Kura Sushi USA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,302 in Kura Sushi USA on August 31, 2024 and sell it today you would earn a total of 6,390 from holding Kura Sushi USA or generate 148.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Cumberland Pharmaceuticals vs. Kura Sushi USA
Performance |
| Timeline |
| Cumberland Pharmaceuticals |
| Kura Sushi USA |
Cumberland Pharmaceuticals and Kura Sushi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumberland Pharmaceuticals and Kura Sushi
The main advantage of trading using opposite Cumberland Pharmaceuticals and Kura Sushi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumberland Pharmaceuticals position performs unexpectedly, Kura Sushi 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 Kura Sushi will offset losses from the drop in Kura Sushi's long position.The idea behind Cumberland Pharmaceuticals and Kura Sushi USA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Kura Sushi vs. RLJ Lodging Trust | Kura Sushi vs. Aquagold International | Kura Sushi vs. Stepstone Group | Kura Sushi 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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