Correlation Between Kura Sushi and Old Dominion
Can any of the company-specific risk be diversified away by investing in both Kura Sushi and Old Dominion 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 Old Dominion 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 Old Dominion Freight, you can compare the effects of market volatilities on Kura Sushi and Old Dominion 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 Old Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Sushi and Old Dominion.
Diversification Opportunities for Kura Sushi and Old Dominion
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kura and Old is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA and Old Dominion Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Dominion Freight 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 Old Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Dominion Freight has no effect on the direction of Kura Sushi i.e., Kura Sushi and Old Dominion go up and down completely randomly.
Pair Corralation between Kura Sushi and Old Dominion
Given the investment horizon of 90 days Kura Sushi USA is expected to generate 1.79 times more return on investment than Old Dominion. However, Kura Sushi is 1.79 times more volatile than Old Dominion Freight. It trades about 0.04 of its potential returns per unit of risk. Old Dominion Freight is currently generating about 0.04 per unit of risk. If you would invest 8,322 in Kura Sushi USA on February 21, 2024 and sell it today you would earn a total of 2,063 from holding Kura Sushi USA or generate 24.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kura Sushi USA vs. Old Dominion Freight
Performance |
Timeline |
Kura Sushi USA |
Old Dominion Freight |
Kura Sushi and Old Dominion Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kura Sushi and Old Dominion
The main advantage of trading using opposite Kura Sushi and Old Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kura Sushi position performs unexpectedly, Old Dominion 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 Old Dominion will offset losses from the drop in Old Dominion's long position.Kura Sushi vs. Brinker International | Kura Sushi vs. Dennys Corp | Kura Sushi vs. Bloomin Brands | Kura Sushi vs. Chuys Holdings |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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