Correlation Between Kura Sushi and Universal Media
Can any of the company-specific risk be diversified away by investing in both Kura Sushi and Universal Media 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 Universal Media 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 Universal Media Group, you can compare the effects of market volatilities on Kura Sushi and Universal Media 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 Universal Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Sushi and Universal Media.
Diversification Opportunities for Kura Sushi and Universal Media
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kura and Universal is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA and Universal Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Media Group 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 Universal Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Media Group has no effect on the direction of Kura Sushi i.e., Kura Sushi and Universal Media go up and down completely randomly.
Pair Corralation between Kura Sushi and Universal Media
Given the investment horizon of 90 days Kura Sushi is expected to generate 10.39 times less return on investment than Universal Media. But when comparing it to its historical volatility, Kura Sushi USA is 5.18 times less risky than Universal Media. It trades about 0.09 of its potential returns per unit of risk. Universal Media Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2.60 in Universal Media Group on September 1, 2024 and sell it today you would earn a total of 1.10 from holding Universal Media Group or generate 42.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kura Sushi USA vs. Universal Media Group
Performance |
| Timeline |
| Kura Sushi USA |
| Universal Media Group |
Kura Sushi and Universal Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kura Sushi and Universal Media
The main advantage of trading using opposite Kura Sushi and Universal Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kura Sushi position performs unexpectedly, Universal Media 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 Universal Media will offset losses from the drop in Universal Media's long position.| Kura Sushi vs. The Wendys Co | Kura Sushi vs. Shake Shack | Kura Sushi vs. Papa Johns International | Kura Sushi vs. Darden Restaurants |
| Universal Media vs. Mesa Air Group | Universal Media vs. Southwest Airlines | Universal Media vs. Paiute Oil Mining | Universal Media vs. Alaska Air Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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