Correlation Between First Watch and Kingsmen Creatives
Can any of the company-specific risk be diversified away by investing in both First Watch and Kingsmen Creatives 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 Kingsmen Creatives 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 Kingsmen Creatives, you can compare the effects of market volatilities on First Watch and Kingsmen Creatives 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 Kingsmen Creatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and Kingsmen Creatives.
Diversification Opportunities for First Watch and Kingsmen Creatives
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Kingsmen is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and Kingsmen Creatives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsmen Creatives 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 Kingsmen Creatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsmen Creatives has no effect on the direction of First Watch i.e., First Watch and Kingsmen Creatives go up and down completely randomly.
Pair Corralation between First Watch and Kingsmen Creatives
Given the investment horizon of 90 days First Watch is expected to generate 2.13 times less return on investment than Kingsmen Creatives. But when comparing it to its historical volatility, First Watch Restaurant is 1.72 times less risky than Kingsmen Creatives. It trades about 0.03 of its potential returns per unit of risk. Kingsmen Creatives is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Kingsmen Creatives on October 13, 2024 and sell it today you would earn a total of 2.00 from holding Kingsmen Creatives or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.71% |
| Values | Daily Returns |
First Watch Restaurant vs. Kingsmen Creatives
Performance |
| Timeline |
| First Watch Restaurant |
| Kingsmen Creatives |
First Watch and Kingsmen Creatives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Watch and Kingsmen Creatives
The main advantage of trading using opposite First Watch and Kingsmen Creatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Watch position performs unexpectedly, Kingsmen Creatives 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 Kingsmen Creatives will offset losses from the drop in Kingsmen Creatives' long position.| First Watch vs. Dine Brands Global | First Watch vs. Bloomin Brands | First Watch vs. BJs Restaurants | First Watch vs. The Cheesecake Factory |
| Kingsmen Creatives vs. The Cheesecake Factory | Kingsmen Creatives vs. First Watch Restaurant | Kingsmen Creatives vs. Dine Brands Global | Kingsmen Creatives vs. Cedar Realty Trust |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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