Correlation Between Noble Romans and Ruths Hospitality

Can any of the company-specific risk be diversified away by investing in both Noble Romans and Ruths Hospitality 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 Noble Romans and Ruths Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Noble Romans and Ruths Hospitality Group, you can compare the effects of market volatilities on Noble Romans and Ruths Hospitality 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 Noble Romans with a short position of Ruths Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Romans and Ruths Hospitality.

Diversification Opportunities for Noble Romans and Ruths Hospitality

-0.18

Correlation Coefficient

Noble Romans  Ruths Hospitality

Good diversification

The 3 months correlation between Noble and Ruths is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Noble Romans and Ruths Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruths Hospitality and Noble Romans 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 Noble Romans are associated (or correlated) with Ruths Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ruths Hospitality has no effect on the direction of Noble Romans i.e., Noble Romans and Ruths Hospitality go up and down completely randomly.

Pair Corralation between Noble Romans and Ruths Hospitality

If you would invest  40.00  in Noble Romans on September 1, 2024 and sell it today you would lose (4.00) from holding Noble Romans or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Noble Romans  vs.  Ruths Hospitality Group

Noble Romans

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Noble Romans are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Noble Romans may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Ruths Hospitality

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Noble Romans and Ruths Hospitality

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

The idea behind Noble Romans and Ruths Hospitality Group 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.