Correlation Between Floor Decor and GEN Restaurant
Can any of the company-specific risk be diversified away by investing in both Floor Decor and GEN Restaurant 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 Floor Decor and GEN Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floor Decor Holdings and GEN Restaurant Group,, you can compare the effects of market volatilities on Floor Decor and GEN Restaurant 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 Floor Decor with a short position of GEN Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floor Decor and GEN Restaurant.
Diversification Opportunities for Floor Decor and GEN Restaurant
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Floor and GEN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Floor Decor Holdings and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, and Floor Decor 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 Floor Decor Holdings are associated (or correlated) with GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of Floor Decor i.e., Floor Decor and GEN Restaurant go up and down completely randomly.
Pair Corralation between Floor Decor and GEN Restaurant
Considering the 90-day investment horizon Floor Decor Holdings is expected to generate 0.62 times more return on investment than GEN Restaurant. However, Floor Decor Holdings is 1.63 times less risky than GEN Restaurant. It trades about 0.2 of its potential returns per unit of risk. GEN Restaurant Group, is currently generating about -0.04 per unit of risk. If you would invest 10,012 in Floor Decor Holdings on August 30, 2024 and sell it today you would earn a total of 1,396 from holding Floor Decor Holdings or generate 13.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floor Decor Holdings vs. GEN Restaurant Group,
Performance |
| Timeline |
| Floor Decor Holdings |
| GEN Restaurant Group, |
Floor Decor and GEN Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floor Decor and GEN Restaurant
The main advantage of trading using opposite Floor Decor and GEN Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floor Decor position performs unexpectedly, GEN Restaurant 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 GEN Restaurant will offset losses from the drop in GEN Restaurant's long position.| Floor Decor vs. Arhaus Inc | Floor Decor vs. Live Ventures | Floor Decor vs. Haverty Furniture Companies | Floor Decor vs. Haverty Furniture Companies |
| GEN Restaurant vs. Allient | GEN Restaurant vs. NioCorp Developments Ltd | GEN Restaurant vs. Nextplat Corp | GEN Restaurant vs. Asure Software |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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