Correlation Between Kura Sushi and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both Kura Sushi and Compania Cervecerias 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 Compania Cervecerias 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 Compania Cervecerias Unidas, you can compare the effects of market volatilities on Kura Sushi and Compania Cervecerias 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 Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Sushi and Compania Cervecerias.
Diversification Opportunities for Kura Sushi and Compania Cervecerias
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kura and Compania is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias 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 Compania Cervecerias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Cervecerias has no effect on the direction of Kura Sushi i.e., Kura Sushi and Compania Cervecerias go up and down completely randomly.
Pair Corralation between Kura Sushi and Compania Cervecerias
Given the investment horizon of 90 days Kura Sushi USA is expected to generate 2.88 times more return on investment than Compania Cervecerias. However, Kura Sushi is 2.88 times more volatile than Compania Cervecerias Unidas. It trades about 0.09 of its potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about 0.17 per unit of risk. If you would invest 9,982 in Kura Sushi USA on September 1, 2024 and sell it today you would earn a total of 710.00 from holding Kura Sushi USA or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kura Sushi USA vs. Compania Cervecerias Unidas
Performance |
| Timeline |
| Kura Sushi USA |
| Compania Cervecerias |
Kura Sushi and Compania Cervecerias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kura Sushi and Compania Cervecerias
The main advantage of trading using opposite Kura Sushi and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kura Sushi position performs unexpectedly, Compania Cervecerias 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 Compania Cervecerias will offset losses from the drop in Compania Cervecerias' long position.| Kura Sushi vs. The Wendys Co | Kura Sushi vs. Shake Shack | Kura Sushi vs. Papa Johns International | Kura Sushi vs. Darden Restaurants |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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