Correlation Between First Watch and Electrovaya Common
Can any of the company-specific risk be diversified away by investing in both First Watch and Electrovaya Common 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 Electrovaya Common 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 Electrovaya Common Shares, you can compare the effects of market volatilities on First Watch and Electrovaya Common 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 Electrovaya Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and Electrovaya Common.
Diversification Opportunities for First Watch and Electrovaya Common
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Electrovaya is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and Electrovaya Common Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya Common Shares 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 Electrovaya Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya Common Shares has no effect on the direction of First Watch i.e., First Watch and Electrovaya Common go up and down completely randomly.
Pair Corralation between First Watch and Electrovaya Common
Given the investment horizon of 90 days First Watch is expected to generate 16.45 times less return on investment than Electrovaya Common. But when comparing it to its historical volatility, First Watch Restaurant is 1.2 times less risky than Electrovaya Common. It trades about 0.02 of its potential returns per unit of risk. Electrovaya Common Shares is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 217.00 in Electrovaya Common Shares on October 23, 2024 and sell it today you would earn a total of 30.00 from holding Electrovaya Common Shares or generate 13.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Watch Restaurant vs. Electrovaya Common Shares
Performance |
| Timeline |
| First Watch Restaurant |
| Electrovaya Common Shares |
First Watch and Electrovaya Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Watch and Electrovaya Common
The main advantage of trading using opposite First Watch and Electrovaya Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Watch position performs unexpectedly, Electrovaya Common 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 Electrovaya Common will offset losses from the drop in Electrovaya Common's long position.| First Watch vs. Dine Brands Global | First Watch vs. Bloomin Brands | First Watch vs. BJs Restaurants | First Watch vs. The Cheesecake Factory |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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