Correlation Between Rave Restaurant and Kuka AG
Can any of the company-specific risk be diversified away by investing in both Rave Restaurant and Kuka AG 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 Kuka AG 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 Kuka AG ADR, you can compare the effects of market volatilities on Rave Restaurant and Kuka AG 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 Kuka AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rave Restaurant and Kuka AG.
Diversification Opportunities for Rave Restaurant and Kuka AG
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rave and Kuka is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rave Restaurant Group and Kuka AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuka AG ADR 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 Kuka AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuka AG ADR has no effect on the direction of Rave Restaurant i.e., Rave Restaurant and Kuka AG go up and down completely randomly.
Pair Corralation between Rave Restaurant and Kuka AG
If you would invest 214.00 in Rave Restaurant Group on September 4, 2024 and sell it today you would earn a total of 90.00 from holding Rave Restaurant Group or generate 42.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Rave Restaurant Group vs. Kuka AG ADR
Performance |
| Timeline |
| Rave Restaurant Group |
| Kuka AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rave Restaurant and Kuka AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rave Restaurant and Kuka AG
The main advantage of trading using opposite Rave Restaurant and Kuka AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rave Restaurant position performs unexpectedly, Kuka AG 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 Kuka AG will offset losses from the drop in Kuka AG'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 |
| Kuka AG vs. Guangdong Investment Limited | Kuka AG vs. Fast Retailing Co | Kuka AG vs. Old Republic International | Kuka AG vs. Aegon NV ADR |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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