Correlation Between Rave Restaurant and STADION TRILOGY

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Can any of the company-specific risk be diversified away by investing in both Rave Restaurant and STADION TRILOGY 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 STADION TRILOGY 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 STADION TRILOGY ALTERNATIVE, you can compare the effects of market volatilities on Rave Restaurant and STADION TRILOGY 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 STADION TRILOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rave Restaurant and STADION TRILOGY.

Diversification Opportunities for Rave Restaurant and STADION TRILOGY

  Correlation Coefficient

Good diversification

The 1 month correlation between Rave Restaurant and STADION is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Rave Restaurant Group and STADION TRILOGY ALTERNATIVE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STADION TRILOGY ALTE 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 STADION TRILOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STADION TRILOGY ALTE has no effect on the direction of Rave Restaurant i.e., Rave Restaurant and STADION TRILOGY go up and down completely randomly.

Pair Corralation between Rave Restaurant and STADION TRILOGY

Given the investment horizon of 90 days Rave Restaurant Group is expected to under-perform the STADION TRILOGY. In addition to that, Rave Restaurant is 17.27 times more volatile than STADION TRILOGY ALTERNATIVE. It trades about -0.08 of its total potential returns per unit of risk. STADION TRILOGY ALTERNATIVE is currently generating about -0.01 per unit of volatility. If you would invest  1,017  in STADION TRILOGY ALTERNATIVE on September 2, 2022 and sell it today you would lose (1.00)  from holding STADION TRILOGY ALTERNATIVE or give up 0.1% of portfolio value over 90 days.
Time Period1 Month [change]
DirectionMoves Against 
ValuesDaily Returns


 Performance (%) 
Rave Restaurant Group 
Rave Restaurant Performance
0 of 100
Over the last 90 days Rave Restaurant Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2023. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Rave Restaurant Price Channel

STADION Performance
0 of 100
Over the last 90 days STADION TRILOGY ALTERNATIVE has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, STADION TRILOGY is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

STADION Price Channel

Rave Restaurant and STADION TRILOGY Volatility Contrast

   Predicted Return Density   

Pair Trading with Rave Restaurant and STADION TRILOGY

The main advantage of trading using opposite Rave Restaurant and STADION TRILOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rave Restaurant position performs unexpectedly, STADION TRILOGY 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 STADION TRILOGY will offset losses from the drop in STADION TRILOGY's long position.
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The idea behind Rave Restaurant Group and STADION TRILOGY ALTERNATIVE 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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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 CEO Directory module to screen CEOs from public companies around the world.

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