Correlation Between First Watch and Tokyu REIT
Can any of the company-specific risk be diversified away by investing in both First Watch and Tokyu REIT 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 Tokyu REIT 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 Tokyu REIT, you can compare the effects of market volatilities on First Watch and Tokyu REIT 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 Tokyu REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and Tokyu REIT.
Diversification Opportunities for First Watch and Tokyu REIT
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Tokyu is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and Tokyu REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyu REIT 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 Tokyu REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyu REIT has no effect on the direction of First Watch i.e., First Watch and Tokyu REIT go up and down completely randomly.
Pair Corralation between First Watch and Tokyu REIT
If you would invest 1,725 in First Watch Restaurant on August 30, 2024 and sell it today you would earn a total of 123.00 from holding First Watch Restaurant or generate 7.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
First Watch Restaurant vs. Tokyu REIT
Performance |
| Timeline |
| First Watch Restaurant |
| Tokyu REIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Watch and Tokyu REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Watch and Tokyu REIT
The main advantage of trading using opposite First Watch and Tokyu REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Watch position performs unexpectedly, Tokyu REIT 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 Tokyu REIT will offset losses from the drop in Tokyu REIT's long position.| First Watch vs. Chipotle Mexican Grill | First Watch vs. Yum Brands | First Watch vs. The Wendys Co | First Watch vs. McDonalds |
| Tokyu REIT vs. Western Digital | Tokyu REIT vs. Asure Software | Tokyu REIT vs. Radcom | Tokyu REIT vs. Stepan Company |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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