Correlation Between First Watch and Yoshiharu Global

Can any of the company-specific risk be diversified away by investing in both First Watch and Yoshiharu Global 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 Yoshiharu Global 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 Yoshiharu Global Co, you can compare the effects of market volatilities on First Watch and Yoshiharu Global 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 Yoshiharu Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and Yoshiharu Global.

Diversification Opportunities for First Watch and Yoshiharu Global

-0.61

Correlation Coefficient

First Watch  Yoshiharu Global

Excellent diversification

The 3 months correlation between First and Yoshiharu is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and Yoshiharu Global Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yoshiharu Global 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 Yoshiharu Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yoshiharu Global has no effect on the direction of First Watch i.e., First Watch and Yoshiharu Global go up and down completely randomly.

Pair Corralation between First Watch and Yoshiharu Global

Given the investment horizon of 90 days First Watch Restaurant is expected to generate 0.43 times more return on investment than Yoshiharu Global. However, First Watch Restaurant is 2.31 times less risky than Yoshiharu Global. It trades about 0.11 of its potential returns per unit of risk. Yoshiharu Global Co is currently generating about 0.0 per unit of risk. If you would invest  1,568  in First Watch Restaurant on September 2, 2024 and sell it today you would earn a total of  341.00  from holding First Watch Restaurant or generate 21.75% return on investment over 90 days.

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

First Watch Restaurant  vs.  Yoshiharu Global Co

First Watch Restaurant

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Watch Restaurant are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, First Watch reported solid returns over the last few months and may actually be approaching a breakup point.

Yoshiharu Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yoshiharu Global Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Yoshiharu Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with First Watch and Yoshiharu Global

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

The idea behind First Watch Restaurant and Yoshiharu Global Co 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.