Correlation Between One Group and Noble Romans

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

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

Diversification Opportunities for One Group and Noble Romans

-0.1

Correlation Coefficient

One Group  Noble Romans

Good diversification

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

Pair Corralation between One Group and Noble Romans

Given the investment horizon of 90 days One Group is expected to generate 2.4 times less return on investment than Noble Romans. In addition to that, One Group is 1.02 times more volatile than Noble Romans. It trades about 0.02 of its total potential returns per unit of risk. Noble Romans is currently generating about 0.06 per unit of volatility. If you would invest  30.00  in Noble Romans on September 5, 2024 and sell it today you would earn a total of  1.00  from holding Noble Romans or generate 3.33% return on investment over 90 days.

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

One Group Hospitality  vs.  Noble Romans

One Group Hospitality

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in One Group Hospitality are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking signals, One Group is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Noble Romans

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Noble Romans are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Noble Romans displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with One Group and Noble Romans

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

The idea behind One Group Hospitality and Noble Romans 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..