Correlation Between Lavoro Limited and One Group
Can any of the company-specific risk be diversified away by investing in both Lavoro Limited and One Group 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 Lavoro Limited and One Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lavoro Limited Class and One Group Hospitality, you can compare the effects of market volatilities on Lavoro Limited and One Group 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 Lavoro Limited with a short position of One Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lavoro Limited and One Group.
Diversification Opportunities for Lavoro Limited and One Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lavoro and One is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lavoro Limited Class and One Group Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Group Hospitality and Lavoro Limited 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 Lavoro Limited Class are associated (or correlated) with One Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Group Hospitality has no effect on the direction of Lavoro Limited i.e., Lavoro Limited and One Group go up and down completely randomly.
Pair Corralation between Lavoro Limited and One Group
Given the investment horizon of 90 days Lavoro Limited Class is expected to under-perform the One Group. In addition to that, Lavoro Limited is 1.53 times more volatile than One Group Hospitality. It trades about -0.46 of its total potential returns per unit of risk. One Group Hospitality is currently generating about 0.32 per unit of volatility. If you would invest 286.00 in One Group Hospitality on October 23, 2024 and sell it today you would earn a total of 59.00 from holding One Group Hospitality or generate 20.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Lavoro Limited Class vs. One Group Hospitality
Performance |
| Timeline |
| Lavoro Limited Class |
| One Group Hospitality |
Lavoro Limited and One Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lavoro Limited and One Group
The main advantage of trading using opposite Lavoro Limited and One Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lavoro Limited position performs unexpectedly, One Group 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 One Group will offset losses from the drop in One Group's long position.| Lavoro Limited vs. BJs Restaurants | Lavoro Limited vs. Texas Roadhouse | Lavoro Limited vs. First Watch Restaurant | Lavoro Limited vs. The Cheesecake Factory |
| One Group vs. FAT Brands | One Group vs. Potbelly Co | One Group vs. BJs Restaurants | One Group vs. Rave Restaurant 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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