Correlation Between CARRIER and First Watch
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By analyzing existing cross correlation between CARRIER GLOBAL P and First Watch Restaurant, you can compare the effects of market volatilities on CARRIER and First Watch 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 CARRIER with a short position of First Watch. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARRIER and First Watch.
Diversification Opportunities for CARRIER and First Watch
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CARRIER and First is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CARRIER GLOBAL P and First Watch Restaurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Watch Restaurant and CARRIER 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 CARRIER GLOBAL P are associated (or correlated) with First Watch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Watch Restaurant has no effect on the direction of CARRIER i.e., CARRIER and First Watch go up and down completely randomly.
Pair Corralation between CARRIER and First Watch
Assuming the 90 days trading horizon CARRIER is expected to generate 8.46 times less return on investment than First Watch. But when comparing it to its historical volatility, CARRIER GLOBAL P is 3.98 times less risky than First Watch. It trades about 0.02 of its potential returns per unit of risk. First Watch Restaurant is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,478 in First Watch Restaurant on September 2, 2024 and sell it today you would earn a total of 431.00 from holding First Watch Restaurant or generate 29.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.98% |
| Values | Daily Returns |
CARRIER GLOBAL P vs. First Watch Restaurant
Performance |
| Timeline |
| CARRIER GLOBAL P |
| First Watch Restaurant |
CARRIER and First Watch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARRIER and First Watch
The main advantage of trading using opposite CARRIER and First Watch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARRIER position performs unexpectedly, First Watch 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 First Watch will offset losses from the drop in First Watch's long position.| CARRIER vs. GEN Restaurant Group, | CARRIER vs. First Watch Restaurant | CARRIER vs. Yum Brands | CARRIER vs. Amkor Technology |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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