Correlation Between CAVA Group, and SOCGEN

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Can any of the company-specific risk be diversified away by investing in both CAVA Group, and SOCGEN 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 SOCGEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAVA Group, and SOCGEN 4677 15 JUN 27, you can compare the effects of market volatilities on CAVA Group, and SOCGEN 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 SOCGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAVA Group, and SOCGEN.

Diversification Opportunities for CAVA Group, and SOCGEN

CAVASOCGENDiversified AwayCAVASOCGENDiversified Away100%
0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between CAVA and SOCGEN is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CAVA Group, and SOCGEN 4677 15 JUN 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOCGEN 4677 15 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 SOCGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOCGEN 4677 15 has no effect on the direction of CAVA Group, i.e., CAVA Group, and SOCGEN go up and down completely randomly.

Pair Corralation between CAVA Group, and SOCGEN

Given the investment horizon of 90 days CAVA Group, is expected to generate 4.09 times more return on investment than SOCGEN. However, CAVA Group, is 4.09 times more volatile than SOCGEN 4677 15 JUN 27. It trades about 0.01 of its potential returns per unit of risk. SOCGEN 4677 15 JUN 27 is currently generating about -0.3 per unit of risk. If you would invest  12,430  in CAVA Group, on September 18, 2024 and sell it today you would lose (93.00) from holding CAVA Group, or give up 0.75% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy21.88%
ValuesDaily Returns

CAVA Group,  vs.  SOCGEN 4677 15 JUN 27

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 05101520
JavaScript chart by amCharts 3.21.15CAVA 83368TBM9
       Timeline  
CAVA Group, 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days CAVA Group, has generated negative risk-adjusted returns adding no value to investors with long positions. 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec120130140150160170
SOCGEN 4677 15 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SOCGEN 4677 15 JUN 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for SOCGEN 4677 15 JUN 27 investors.
JavaScript chart by amCharts 3.21.1530233125979899100101

CAVA Group, and SOCGEN Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.85-5.88-3.91-1.940.01.943.945.947.949.94 0.10.20.30.40.5
JavaScript chart by amCharts 3.21.15CAVA 83368TBM9
       Returns  

Pair Trading with CAVA Group, and SOCGEN

The main advantage of trading using opposite CAVA Group, and SOCGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAVA Group, position performs unexpectedly, SOCGEN 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 SOCGEN will offset losses from the drop in SOCGEN's long position.
The idea behind CAVA Group, and SOCGEN 4677 15 JUN 27 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.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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