Correlation Between Kura Sushi and VBI Vaccines

Can any of the company-specific risk be diversified away by investing in both Kura Sushi and VBI Vaccines 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 Kura Sushi and VBI Vaccines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kura Sushi USA and VBI Vaccines, you can compare the effects of market volatilities on Kura Sushi and VBI Vaccines 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 Kura Sushi with a short position of VBI Vaccines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Sushi and VBI Vaccines.

Diversification Opportunities for Kura Sushi and VBI Vaccines

-0.75

Correlation Coefficient

Kura Sushi  VBI Vaccines

Pay attention - limited upside

The 3 months correlation between Kura and VBI is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA and VBI Vaccines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VBI Vaccines and Kura Sushi 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 Kura Sushi USA are associated (or correlated) with VBI Vaccines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VBI Vaccines has no effect on the direction of Kura Sushi i.e., Kura Sushi and VBI Vaccines go up and down completely randomly.

Pair Corralation between Kura Sushi and VBI Vaccines

Given the investment horizon of 90 days Kura Sushi USA is expected to under-perform the VBI Vaccines. But the stock apears to be less risky and, when comparing its historical volatility, Kura Sushi USA is 10.52 times less risky than VBI Vaccines. The stock trades about -0.28 of its potential returns per unit of risk. The VBI Vaccines is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  0.08  in VBI Vaccines on September 28, 2024 and sell it today you would lose (0.03) from holding VBI Vaccines or give up 37.5% of portfolio value over 90 days.

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

Kura Sushi USA  vs.  VBI Vaccines

Kura Sushi USA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kura Sushi USA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Kura Sushi unveiled solid returns over the last few months and may actually be approaching a breakup point.

VBI Vaccines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VBI Vaccines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Kura Sushi and VBI Vaccines

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

The idea behind Kura Sushi USA and VBI Vaccines 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.