Correlation Between Rave Restaurant and Optimism

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Rave Restaurant and Optimism 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 Rave Restaurant and Optimism into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rave Restaurant Group and Optimism, you can compare the effects of market volatilities on Rave Restaurant and Optimism 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 Rave Restaurant with a short position of Optimism. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rave Restaurant and Optimism.

Diversification Opportunities for Rave Restaurant and Optimism

-0.1
  Correlation Coefficient

Good diversification

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

Pair Corralation between Rave Restaurant and Optimism

Given the investment horizon of 90 days Rave Restaurant is expected to generate 27.07 times less return on investment than Optimism. But when comparing it to its historical volatility, Rave Restaurant Group is 13.91 times less risky than Optimism. It trades about 0.03 of its potential returns per unit of risk. Optimism is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Optimism on September 3, 2022 and sell it today you would earn a total of  105.00  from holding Optimism or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy96.89%
ValuesDaily Returns

Rave Restaurant Group  vs.  Optimism

 Performance (%) 
       Timeline  
Rave Restaurant Group 
Rave Restaurant Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Rave Restaurant Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Rave Restaurant exhibited solid returns over the last few months and may actually be approaching a breakup point.

Rave Restaurant Price Channel

Optimism 
Optimism Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Optimism are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Optimism sustained solid returns over the last few months and may actually be approaching a breakup point.

Optimism Price Channel

Rave Restaurant and Optimism Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Rave Restaurant and Optimism

The main advantage of trading using opposite Rave Restaurant and Optimism positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rave Restaurant position performs unexpectedly, Optimism 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 Optimism will offset losses from the drop in Optimism's long position.
Rave Restaurant vs. Anheuser-Busch InBev SANV
Rave Restaurant vs. Northwest Healthcare Properties
The idea behind Rave Restaurant Group and Optimism 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.
Optimism vs. XRP
Optimism vs. Polygon
Optimism vs. Chainlink
Optimism vs. Solana
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

Other Complementary Tools

Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go