Correlation Between Jack In and Chuys Holdings

Can any of the company-specific risk be diversified away by investing in both Jack In and Chuys Holdings 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 Jack In and Chuys Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jack In The and Chuys Holdings, you can compare the effects of market volatilities on Jack In and Chuys Holdings 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 Jack In with a short position of Chuys Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack In and Chuys Holdings.

Diversification Opportunities for Jack In and Chuys Holdings

-0.19

Correlation Coefficient

Jack In  Chuys Holdings

Good diversification

The 3 months correlation between Jack and Chuys is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Jack In The and Chuys Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuys Holdings and Jack In 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 Jack In The are associated (or correlated) with Chuys Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuys Holdings has no effect on the direction of Jack In i.e., Jack In and Chuys Holdings go up and down completely randomly.

Pair Corralation between Jack In and Chuys Holdings

Given the investment horizon of 90 days Jack In The is expected to generate 35.91 times more return on investment than Chuys Holdings. However, Jack In is 35.91 times more volatile than Chuys Holdings. It trades about 0.04 of its potential returns per unit of risk. Chuys Holdings is currently generating about 0.36 per unit of risk. If you would invest  4,691  in Jack In The on September 1, 2024 and sell it today you would earn a total of  194.00  from holding Jack In The or generate 4.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	46.03%
Values	Daily Returns

Jack In The  vs.  Chuys Holdings

Jack In

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jack In The are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Jack In is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Chuys Holdings

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days Chuys Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Chuys Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jack In and Chuys Holdings

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

The idea behind Jack In The and Chuys Holdings 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.