Correlation Between Noodles and Container Store
Can any of the company-specific risk be diversified away by investing in both Noodles and Container Store 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 Noodles and Container Store into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noodles Company and Container Store Group, you can compare the effects of market volatilities on Noodles and Container Store 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 Noodles with a short position of Container Store. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noodles and Container Store.
Diversification Opportunities for Noodles and Container Store
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Noodles and Container is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Noodles Company and Container Store Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Container Store Group and Noodles 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 Noodles Company are associated (or correlated) with Container Store. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Container Store Group has no effect on the direction of Noodles i.e., Noodles and Container Store go up and down completely randomly.
Pair Corralation between Noodles and Container Store
Given the investment horizon of 90 days Noodles Company is expected to generate 0.5 times more return on investment than Container Store. However, Noodles Company is 2.0 times less risky than Container Store. It trades about -0.41 of its potential returns per unit of risk. Container Store Group is currently generating about -0.35 per unit of risk. If you would invest 124.00 in Noodles Company on August 25, 2024 and sell it today you would lose (48.77) from holding Noodles Company or give up 39.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noodles Company vs. Container Store Group
Performance |
| Timeline |
| Noodles Company |
| Container Store Group |
Noodles and Container Store Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noodles and Container Store
The main advantage of trading using opposite Noodles and Container Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noodles position performs unexpectedly, Container Store 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 Container Store will offset losses from the drop in Container Store's long position.| Noodles vs. Chipotle Mexican Grill | Noodles vs. Eshallgo Class A | Noodles vs. Amtech Systems | Noodles vs. Gold Fields Ltd |
| Container Store vs. Tillys Inc | Container Store vs. Big 5 Sporting | Container Store vs. Sportsmans | Container Store vs. Noodles Company |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |