Correlation Between Rave Restaurant and Willamette Valley
Can any of the company-specific risk be diversified away by investing in both Rave Restaurant and Willamette Valley 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 Willamette Valley 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 Willamette Valley Vineyards, you can compare the effects of market volatilities on Rave Restaurant and Willamette Valley 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 Willamette Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rave Restaurant and Willamette Valley.
Diversification Opportunities for Rave Restaurant and Willamette Valley
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rave and Willamette is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Rave Restaurant Group and Willamette Valley Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willamette Valley 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 Willamette Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willamette Valley has no effect on the direction of Rave Restaurant i.e., Rave Restaurant and Willamette Valley go up and down completely randomly.
Pair Corralation between Rave Restaurant and Willamette Valley
Given the investment horizon of 90 days Rave Restaurant Group is expected to generate 2.8 times more return on investment than Willamette Valley. However, Rave Restaurant is 2.8 times more volatile than Willamette Valley Vineyards. It trades about 0.02 of its potential returns per unit of risk. Willamette Valley Vineyards is currently generating about -0.04 per unit of risk. If you would invest 300.00 in Rave Restaurant Group on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Rave Restaurant Group or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rave Restaurant Group vs. Willamette Valley Vineyards
Performance |
| Timeline |
| Rave Restaurant Group |
| Willamette Valley |
Rave Restaurant and Willamette Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rave Restaurant and Willamette Valley
The main advantage of trading using opposite Rave Restaurant and Willamette Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rave Restaurant position performs unexpectedly, Willamette Valley 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 Willamette Valley will offset losses from the drop in Willamette Valley'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 |
| Willamette Valley vs. Naked Wines plc | Willamette Valley vs. Andrew Peller Limited | Willamette Valley vs. Iconic Brands | Willamette Valley vs. Naked Wines plc |
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.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |