Correlation Between First Watch and CARRIER
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By analyzing existing cross correlation between First Watch Restaurant and CARRIER GLOBAL P, you can compare the effects of market volatilities on First Watch and CARRIER 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 CARRIER. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and CARRIER.
Diversification Opportunities for First Watch and CARRIER
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and CARRIER is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and CARRIER GLOBAL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARRIER GLOBAL P 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 CARRIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARRIER GLOBAL P has no effect on the direction of First Watch i.e., First Watch and CARRIER go up and down completely randomly.
Pair Corralation between First Watch and CARRIER
Given the investment horizon of 90 days First Watch Restaurant is expected to generate 6.43 times more return on investment than CARRIER. However, First Watch is 6.43 times more volatile than CARRIER GLOBAL P. It trades about 0.01 of its potential returns per unit of risk. CARRIER GLOBAL P is currently generating about 0.03 per unit of risk. If you would invest 1,900 in First Watch Restaurant on September 2, 2024 and sell it today you would earn a total of 9.00 from holding First Watch Restaurant or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.18% |
| Values | Daily Returns |
First Watch Restaurant vs. CARRIER GLOBAL P
Performance |
| Timeline |
| First Watch Restaurant |
| CARRIER GLOBAL P |
First Watch and CARRIER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Watch and CARRIER
The main advantage of trading using opposite First Watch and CARRIER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Watch position performs unexpectedly, CARRIER 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 CARRIER will offset losses from the drop in CARRIER's long position.The idea behind First Watch Restaurant and CARRIER GLOBAL P 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.| CARRIER vs. GEN Restaurant Group, | CARRIER vs. First Watch Restaurant | CARRIER vs. Yum Brands | CARRIER vs. Amkor Technology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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