Correlation Between First Watch and Better World
Can any of the company-specific risk be diversified away by investing in both First Watch and Better World 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 First Watch and Better World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Watch Restaurant and Better World Acquisition, you can compare the effects of market volatilities on First Watch and Better World 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 First Watch with a short position of Better World. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and Better World.
Diversification Opportunities for First Watch and Better World
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Better is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and Better World Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better World Acquisition and First Watch 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 First Watch Restaurant are associated (or correlated) with Better World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better World Acquisition has no effect on the direction of First Watch i.e., First Watch and Better World go up and down completely randomly.
Pair Corralation between First Watch and Better World
If you would invest 1,721 in First Watch Restaurant on September 4, 2024 and sell it today you would earn a total of 165.00 from holding First Watch Restaurant or generate 9.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
First Watch Restaurant vs. Better World Acquisition
Performance |
| Timeline |
| First Watch Restaurant |
| Better World Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Watch and Better World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Watch and Better World
The main advantage of trading using opposite First Watch and Better World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Watch position performs unexpectedly, Better World 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 Better World will offset losses from the drop in Better World's long position.| First Watch vs. Hyatt Hotels | First Watch vs. Smart Share Global | First Watch vs. Sweetgreen | First Watch vs. Wyndham Hotels Resorts |
| Better World vs. GameStop Corp | Better World vs. Wicket Gaming AB | Better World vs. Tenaris SA ADR | Better World vs. CF Industries Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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