Correlation Between ZA and Ruths Hospitality
Can any of the company-specific risk be diversified away by investing in both ZA and Ruths Hospitality 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 ZA and Ruths Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZA Group and Ruths Hospitality Group, you can compare the effects of market volatilities on ZA and Ruths Hospitality 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 ZA with a short position of Ruths Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZA and Ruths Hospitality.
Diversification Opportunities for ZA and Ruths Hospitality
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between ZA and Ruths is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ZA Group and Ruths Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruths Hospitality and ZA 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 ZA Group are associated (or correlated) with Ruths Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ruths Hospitality has no effect on the direction of ZA i.e., ZA and Ruths Hospitality go up and down completely randomly.
Pair Corralation between ZA and Ruths Hospitality
If you would invest 0.01 in ZA Group on August 31, 2024 and sell it today you would earn a total of 0.00 from holding ZA Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
ZA Group vs. Ruths Hospitality Group
Performance |
| Timeline |
| ZA Group |
| Ruths Hospitality |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ZA and Ruths Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZA and Ruths Hospitality
The main advantage of trading using opposite ZA and Ruths Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZA position performs unexpectedly, Ruths Hospitality 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 Ruths Hospitality will offset losses from the drop in Ruths Hospitality's long position.The idea behind ZA Group and Ruths Hospitality Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ruths Hospitality vs. Dine Brands Global | Ruths Hospitality vs. Bloomin Brands | Ruths Hospitality vs. BJs Restaurants | Ruths Hospitality vs. The Cheesecake Factory |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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