Correlation Between Real Good and Tattooed Chef
Can any of the company-specific risk be diversified away by investing in both Real Good and Tattooed Chef 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 Real Good and Tattooed Chef into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Good Food and Tattooed Chef, you can compare the effects of market volatilities on Real Good and Tattooed Chef 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 Real Good with a short position of Tattooed Chef. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Good and Tattooed Chef.
Diversification Opportunities for Real Good and Tattooed Chef
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Real and Tattooed is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Real Good Food and Tattooed Chef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tattooed Chef and Real Good 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 Real Good Food are associated (or correlated) with Tattooed Chef. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tattooed Chef has no effect on the direction of Real Good i.e., Real Good and Tattooed Chef go up and down completely randomly.
Pair Corralation between Real Good and Tattooed Chef
Considering the 90-day investment horizon Real Good Food is expected to generate 0.83 times more return on investment than Tattooed Chef. However, Real Good Food is 1.21 times less risky than Tattooed Chef. It trades about -0.06 of its potential returns per unit of risk. Tattooed Chef is currently generating about -0.24 per unit of risk. If you would invest 525.00 in Real Good Food on August 27, 2024 and sell it today you would lose (499.00) from holding Real Good Food or give up 95.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 25.49% |
| Values | Daily Returns |
Real Good Food vs. Tattooed Chef
Performance |
| Timeline |
| Real Good Food |
| Tattooed Chef |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Real Good and Tattooed Chef Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Good and Tattooed Chef
The main advantage of trading using opposite Real Good and Tattooed Chef positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Good position performs unexpectedly, Tattooed Chef 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 Tattooed Chef will offset losses from the drop in Tattooed Chef's long position.| Real Good vs. Bellring Brands LLC | Real Good vs. Ingredion Incorporated | Real Good vs. Nomad Foods | Real Good vs. Simply Good Foods |
| Tattooed Chef vs. Kraft Heinz Co | Tattooed Chef vs. Hormel Foods | Tattooed Chef vs. Kellanova | Tattooed Chef vs. Blue Star Foods |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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