Correlation Between Rave Restaurant and Chuys Holdings
Can any of the company-specific risk be diversified away by investing in both Rave Restaurant and Chuys Holdings 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 Rave Restaurant and Chuys Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rave Restaurant Group and Chuys Holdings, you can compare the effects of market volatilities on Rave Restaurant and Chuys Holdings 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 Rave Restaurant with a short position of Chuys Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rave Restaurant and Chuys Holdings.
Diversification Opportunities for Rave Restaurant and Chuys Holdings
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Rave and Chuys is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Rave Restaurant Group and Chuys Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuys Holdings and Rave Restaurant 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 Rave Restaurant Group are associated (or correlated) with Chuys Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuys Holdings has no effect on the direction of Rave Restaurant i.e., Rave Restaurant and Chuys Holdings go up and down completely randomly.
Pair Corralation between Rave Restaurant and Chuys Holdings
If you would invest 280.00 in Rave Restaurant Group on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Rave Restaurant Group or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Rave Restaurant Group vs. Chuys Holdings
Performance |
| Timeline |
| Rave Restaurant Group |
| Chuys Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Rave Restaurant and Chuys Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rave Restaurant and Chuys Holdings
The main advantage of trading using opposite Rave Restaurant and Chuys Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rave Restaurant position performs unexpectedly, Chuys Holdings 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 Chuys Holdings will offset losses from the drop in Chuys Holdings' long position.| Rave Restaurant vs. Ark Restaurants Corp | Rave Restaurant vs. One Group Hospitality | Rave Restaurant vs. Flanigans Enterprises | Rave Restaurant vs. Noble Romans |
| Chuys Holdings vs. Brinker International | Chuys Holdings vs. Bloomin Brands | Chuys Holdings vs. FAT Brands | Chuys Holdings vs. Potbelly Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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