Correlation Between CAVA Group, and Blue World

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Can any of the company-specific risk be diversified away by investing in both CAVA Group, and Blue World 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 CAVA Group, and Blue World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAVA Group, and Blue World Acquisition, you can compare the effects of market volatilities on CAVA Group, and Blue World 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 CAVA Group, with a short position of Blue World. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAVA Group, and Blue World.

Diversification Opportunities for CAVA Group, and Blue World

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between CAVA and Blue is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CAVA Group, and Blue World Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue World Acquisition and CAVA Group, 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 CAVA Group, are associated (or correlated) with Blue World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue World Acquisition has no effect on the direction of CAVA Group, i.e., CAVA Group, and Blue World go up and down completely randomly.

Pair Corralation between CAVA Group, and Blue World

If you would invest  12,430  in CAVA Group, on September 18, 2024 and sell it today you would earn a total of  249.00  from holding CAVA Group, or generate 2.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy1.59%
ValuesDaily Returns

CAVA Group,  vs.  Blue World Acquisition

 Performance 
       Timeline  
CAVA Group, 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in CAVA Group, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CAVA Group, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Blue World Acquisition 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Blue World Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Blue World is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CAVA Group, and Blue World Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CAVA Group, and Blue World

The main advantage of trading using opposite CAVA Group, and Blue World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAVA Group, position performs unexpectedly, Blue World 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 Blue World will offset losses from the drop in Blue World's long position.
The idea behind CAVA Group, and Blue World Acquisition 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.
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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