Correlation Between Potbelly and Kura Sushi
Can any of the company-specific risk be diversified away by investing in both Potbelly 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 Potbelly and Kura Sushi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Potbelly Co and Kura Sushi USA, you can compare the effects of market volatilities on Potbelly 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 Potbelly with a short position of Kura Sushi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Potbelly and Kura Sushi.
Diversification Opportunities for Potbelly and Kura Sushi
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Potbelly and Kura is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Potbelly Co 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 Potbelly 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 Potbelly Co 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 Potbelly i.e., Potbelly and Kura Sushi go up and down completely randomly.
Pair Corralation between Potbelly and Kura Sushi
Given the investment horizon of 90 days Potbelly is expected to generate 6.06 times less return on investment than Kura Sushi. But when comparing it to its historical volatility, Potbelly Co is 1.49 times less risky than Kura Sushi. It trades about 0.02 of its potential returns per unit of risk. Kura Sushi USA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,346 in Kura Sushi USA on September 1, 2024 and sell it today you would earn a total of 4,346 from holding Kura Sushi USA or generate 68.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Potbelly Co vs. Kura Sushi USA
Performance |
| Timeline |
| Potbelly |
| Kura Sushi USA |
Potbelly and Kura Sushi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Potbelly and Kura Sushi
The main advantage of trading using opposite Potbelly and Kura Sushi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Potbelly 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.| Potbelly vs. FAT Brands | Potbelly vs. BJs Restaurants | Potbelly vs. One Group Hospitality | Potbelly vs. El Pollo Loco |
| Kura Sushi vs. The Wendys Co | Kura Sushi vs. Shake Shack | Kura Sushi vs. Papa Johns International | Kura Sushi vs. Darden Restaurants |
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
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |