Correlation Between Rave Restaurant and WEBTOON Entertainment
Can any of the company-specific risk be diversified away by investing in both Rave Restaurant and WEBTOON Entertainment 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 WEBTOON Entertainment 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 WEBTOON Entertainment Common, you can compare the effects of market volatilities on Rave Restaurant and WEBTOON Entertainment 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 WEBTOON Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rave Restaurant and WEBTOON Entertainment.
Diversification Opportunities for Rave Restaurant and WEBTOON Entertainment
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rave and WEBTOON is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Rave Restaurant Group and WEBTOON Entertainment Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBTOON Entertainment 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 WEBTOON Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBTOON Entertainment has no effect on the direction of Rave Restaurant i.e., Rave Restaurant and WEBTOON Entertainment go up and down completely randomly.
Pair Corralation between Rave Restaurant and WEBTOON Entertainment
Given the investment horizon of 90 days Rave Restaurant Group is expected to generate 0.56 times more return on investment than WEBTOON Entertainment. However, Rave Restaurant Group is 1.78 times less risky than WEBTOON Entertainment. It trades about 0.05 of its potential returns per unit of risk. WEBTOON Entertainment Common is currently generating about -0.07 per unit of risk. If you would invest 163.00 in Rave Restaurant Group on August 27, 2024 and sell it today you would earn a total of 126.00 from holding Rave Restaurant Group or generate 77.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 21.37% |
| Values | Daily Returns |
Rave Restaurant Group vs. WEBTOON Entertainment Common
Performance |
| Timeline |
| Rave Restaurant Group |
| WEBTOON Entertainment |
Rave Restaurant and WEBTOON Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rave Restaurant and WEBTOON Entertainment
The main advantage of trading using opposite Rave Restaurant and WEBTOON Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rave Restaurant position performs unexpectedly, WEBTOON Entertainment 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 WEBTOON Entertainment will offset losses from the drop in WEBTOON Entertainment'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 |
| WEBTOON Entertainment vs. RCI Hospitality Holdings | WEBTOON Entertainment vs. Artisan Partners Asset | WEBTOON Entertainment vs. Cracker Barrel Old | WEBTOON Entertainment vs. Rave Restaurant Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |