Correlation Between El Pollo and Kura Sushi
Can any of the company-specific risk be diversified away by investing in both El Pollo and Kura Sushi 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 El Pollo and Kura Sushi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between El Pollo Loco and Kura Sushi USA, you can compare the effects of market volatilities on El Pollo and Kura Sushi 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 El Pollo with a short position of Kura Sushi. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Pollo and Kura Sushi.
Diversification Opportunities for El Pollo and Kura Sushi
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LOCO and Kura is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding El Pollo Loco and Kura Sushi USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kura Sushi USA and El Pollo 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 El Pollo Loco are associated (or correlated) with Kura Sushi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kura Sushi USA has no effect on the direction of El Pollo i.e., El Pollo and Kura Sushi go up and down completely randomly.
Pair Corralation between El Pollo and Kura Sushi
Given the investment horizon of 90 days El Pollo Loco is expected to under-perform the Kura Sushi. But the stock apears to be less risky and, when comparing its historical volatility, El Pollo Loco is 2.09 times less risky than Kura Sushi. The stock trades about -0.07 of its potential returns per unit of risk. The Kura Sushi USA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 9,103 in Kura Sushi USA on September 13, 2024 and sell it today you would earn a total of 918.00 from holding Kura Sushi USA or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Pollo Loco vs. Kura Sushi USA
Performance |
| Timeline |
| El Pollo Loco |
| Kura Sushi USA |
El Pollo and Kura Sushi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Pollo and Kura Sushi
The main advantage of trading using opposite El Pollo and Kura Sushi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Pollo position performs unexpectedly, Kura Sushi 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 Kura Sushi will offset losses from the drop in Kura Sushi's long position.| El Pollo vs. FAT Brands | El Pollo vs. Potbelly Co | El Pollo vs. BJs Restaurants | El Pollo vs. One Group Hospitality |
| Kura Sushi vs. Brinker International | Kura Sushi vs. Dennys Corp | Kura Sushi vs. Bloomin Brands | Kura Sushi vs. Jack In The |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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