Correlation Between First Watch and SolarBank
Can any of the company-specific risk be diversified away by investing in both First Watch and SolarBank 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 SolarBank 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 SolarBank, you can compare the effects of market volatilities on First Watch and SolarBank 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 SolarBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and SolarBank.
Diversification Opportunities for First Watch and SolarBank
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and SolarBank is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and SolarBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarBank 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 SolarBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarBank has no effect on the direction of First Watch i.e., First Watch and SolarBank go up and down completely randomly.
Pair Corralation between First Watch and SolarBank
If you would invest 1,557 in First Watch Restaurant on October 26, 2024 and sell it today you would earn a total of 350.00 from holding First Watch Restaurant or generate 22.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.81% |
| Values | Daily Returns |
First Watch Restaurant vs. SolarBank
Performance |
| Timeline |
| First Watch Restaurant |
| SolarBank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Watch and SolarBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Watch and SolarBank
The main advantage of trading using opposite First Watch and SolarBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Watch position performs unexpectedly, SolarBank 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 SolarBank will offset losses from the drop in SolarBank'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 |
| SolarBank vs. HNI Corp | SolarBank vs. First Watch Restaurant | SolarBank vs. Merit Medical Systems | SolarBank vs. Shake Shack |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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