Correlation Between First Watch and FitLife Brands,

Can any of the company-specific risk be diversified away by investing in both First Watch and FitLife Brands, 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 First Watch and FitLife Brands, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Watch Restaurant and FitLife Brands, Common, you can compare the effects of market volatilities on First Watch and FitLife Brands, 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 First Watch with a short position of FitLife Brands,. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and FitLife Brands,.

Diversification Opportunities for First Watch and FitLife Brands,

0.1

Correlation Coefficient

First Watch  FitLife Brands,

Average diversification

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

Pair Corralation between First Watch and FitLife Brands,

Given the investment horizon of 90 days First Watch Restaurant is expected to generate 1.5 times more return on investment than FitLife Brands,. However, First Watch is 1.5 times more volatile than FitLife Brands, Common. It trades about 0.13 of its potential returns per unit of risk. FitLife Brands, Common is currently generating about 0.03 per unit of risk. If you would invest  1,534  in First Watch Restaurant on September 17, 2024 and sell it today you would earn a total of  415.00  from holding First Watch Restaurant or generate 27.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

First Watch Restaurant  vs.  FitLife Brands, Common

First Watch Restaurant

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Watch Restaurant are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, First Watch reported solid returns over the last few months and may actually be approaching a breakup point.

FitLife Brands, Common

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FitLife Brands, Common are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with First Watch and FitLife Brands,

The main advantage of trading using opposite First Watch and FitLife Brands, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Watch position performs unexpectedly, FitLife Brands, 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 FitLife Brands, will offset losses from the drop in FitLife Brands,'s long position.

The idea behind First Watch Restaurant and FitLife Brands, Common 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.