Correlation Between Kura Sushi and Bagger Daves
Can any of the company-specific risk be diversified away by investing in both Kura Sushi and Bagger Daves 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 Kura Sushi and Bagger Daves into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kura Sushi USA and Bagger Daves Burger, you can compare the effects of market volatilities on Kura Sushi and Bagger Daves 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 Kura Sushi with a short position of Bagger Daves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Sushi and Bagger Daves.
Diversification Opportunities for Kura Sushi and Bagger Daves
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kura and Bagger is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA and Bagger Daves Burger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bagger Daves Burger and Kura Sushi 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 Kura Sushi USA are associated (or correlated) with Bagger Daves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bagger Daves Burger has no effect on the direction of Kura Sushi i.e., Kura Sushi and Bagger Daves go up and down completely randomly.
Pair Corralation between Kura Sushi and Bagger Daves
Given the investment horizon of 90 days Kura Sushi USA is expected to generate 1.01 times more return on investment than Bagger Daves. However, Kura Sushi is 1.01 times more volatile than Bagger Daves Burger. It trades about 0.09 of its potential returns per unit of risk. Bagger Daves Burger is currently generating about -0.02 per unit of risk. If you would invest 9,981 in Kura Sushi USA on September 2, 2024 and sell it today you would earn a total of 711.00 from holding Kura Sushi USA or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kura Sushi USA vs. Bagger Daves Burger
Performance |
| Timeline |
| Kura Sushi USA |
| Bagger Daves Burger |
Kura Sushi and Bagger Daves Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kura Sushi and Bagger Daves
The main advantage of trading using opposite Kura Sushi and Bagger Daves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kura Sushi position performs unexpectedly, Bagger Daves 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 Bagger Daves will offset losses from the drop in Bagger Daves' long position.The idea behind Kura Sushi USA and Bagger Daves Burger 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.| Bagger Daves vs. McDonalds | Bagger Daves vs. Starbucks | Bagger Daves vs. Chipotle Mexican Grill | Bagger Daves vs. Compass Group PLC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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