Correlation Between First Watch and Where Food
Can any of the company-specific risk be diversified away by investing in both First Watch and Where Food 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 Where Food 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 Where Food Comes, you can compare the effects of market volatilities on First Watch and Where Food 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 Where Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and Where Food.
Diversification Opportunities for First Watch and Where Food
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Where is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and Where Food Comes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Where Food Comes 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 Where Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Where Food Comes has no effect on the direction of First Watch i.e., First Watch and Where Food go up and down completely randomly.
Pair Corralation between First Watch and Where Food
Given the investment horizon of 90 days First Watch is expected to generate 1.59 times less return on investment than Where Food. In addition to that, First Watch is 2.3 times more volatile than Where Food Comes. It trades about 0.11 of its total potential returns per unit of risk. Where Food Comes is currently generating about 0.39 per unit of volatility. If you would invest 1,117 in Where Food Comes on September 5, 2024 and sell it today you would earn a total of 183.00 from holding Where Food Comes or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Watch Restaurant vs. Where Food Comes
Performance |
| Timeline |
| First Watch Restaurant |
| Where Food Comes |
First Watch and Where Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Watch and Where Food
The main advantage of trading using opposite First Watch and Where Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Watch position performs unexpectedly, Where Food 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 Where Food will offset losses from the drop in Where Food's long position.| First Watch vs. Hyatt Hotels | First Watch vs. Smart Share Global | First Watch vs. Sweetgreen | First Watch vs. Wyndham Hotels Resorts |
| Where Food vs. Issuer Direct Corp | Where Food vs. Smith Midland Corp | Where Food vs. Bm Technologies | Where Food vs. 1StdibsCom |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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