Correlation Between Rave Restaurant and CPFL Energia
Can any of the company-specific risk be diversified away by investing in both Rave Restaurant and CPFL Energia 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 CPFL Energia 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 CPFL Energia SA, you can compare the effects of market volatilities on Rave Restaurant and CPFL Energia 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 CPFL Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rave Restaurant and CPFL Energia.
Diversification Opportunities for Rave Restaurant and CPFL Energia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rave and CPFL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rave Restaurant Group and CPFL Energia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPFL Energia SA 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 CPFL Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPFL Energia SA has no effect on the direction of Rave Restaurant i.e., Rave Restaurant and CPFL Energia go up and down completely randomly.
Pair Corralation between Rave Restaurant and CPFL Energia
If you would invest 266.00 in Rave Restaurant Group on September 13, 2024 and sell it today you would earn a total of 39.00 from holding Rave Restaurant Group or generate 14.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Rave Restaurant Group vs. CPFL Energia SA
Performance |
| Timeline |
| Rave Restaurant Group |
| CPFL Energia SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rave Restaurant and CPFL Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rave Restaurant and CPFL Energia
The main advantage of trading using opposite Rave Restaurant and CPFL Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rave Restaurant position performs unexpectedly, CPFL Energia 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 CPFL Energia will offset losses from the drop in CPFL Energia's long position.| Rave Restaurant vs. Ark Restaurants Corp | Rave Restaurant vs. One Group Hospitality | Rave Restaurant vs. Flanigans Enterprises | Rave Restaurant vs. Noble Romans |
| CPFL Energia vs. Scandinavian Tobacco Group | CPFL Energia vs. Boston Beer | CPFL Energia vs. The Coca Cola | CPFL Energia vs. Vita Coco |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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