Correlation Between First Watch and JV SPAC
Can any of the company-specific risk be diversified away by investing in both First Watch and JV SPAC 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 JV SPAC 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 JV SPAC Acquisition, you can compare the effects of market volatilities on First Watch and JV SPAC 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 JV SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and JV SPAC.
Diversification Opportunities for First Watch and JV SPAC
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and JVSA is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and JV SPAC Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JV SPAC 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 JV SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JV SPAC Acquisition has no effect on the direction of First Watch i.e., First Watch and JV SPAC go up and down completely randomly.
Pair Corralation between First Watch and JV SPAC
Given the investment horizon of 90 days First Watch Restaurant is expected to generate 13.58 times more return on investment than JV SPAC. However, First Watch is 13.58 times more volatile than JV SPAC Acquisition. It trades about 0.03 of its potential returns per unit of risk. JV SPAC Acquisition is currently generating about 0.09 per unit of risk. If you would invest 1,826 in First Watch Restaurant on September 13, 2024 and sell it today you would earn a total of 132.00 from holding First Watch Restaurant or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Watch Restaurant vs. JV SPAC Acquisition
Performance |
| Timeline |
| First Watch Restaurant |
| JV SPAC Acquisition |
First Watch and JV SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Watch and JV SPAC
The main advantage of trading using opposite First Watch and JV SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Watch position performs unexpectedly, JV SPAC 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 JV SPAC will offset losses from the drop in JV SPAC's long position.The idea behind First Watch Restaurant and JV SPAC Acquisition 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.| JV SPAC vs. Canlan Ice Sports | JV SPAC vs. MI Homes | JV SPAC vs. Hooker Furniture | JV SPAC vs. JBG SMITH Properties |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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