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
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Noodles and Container is -0.47. 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 is expected to generate 1.26 times less return on investment than Container Store. But when comparing it to its historical volatility, Noodles Company is 1.43 times less risky than Container Store. It trades about 0.24 of its potential returns per unit of risk. Container Store Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 236.00 in Container Store Group on November 3, 2024 and sell it today you would earn a total of 29.00 from holding Container Store Group or generate 12.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 14.63% |
| Values | Daily Returns |
Noodles Company vs. Container Store Group
Performance |
| Timeline |
| Noodles Company |
| Container Store Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
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.The idea behind Noodles Company and Container Store Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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