Correlation Between Kura Sushi and TTFB

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

By analyzing existing cross correlation between Kura Sushi Asia and TTFB Co, you can compare the effects of market volatilities on Kura Sushi and TTFB 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 TTFB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Sushi and TTFB.

Diversification Opportunities for Kura Sushi and TTFB

0.28

Correlation Coefficient

Kura Sushi  TTFB

Modest diversification

The 3 months correlation between Kura and TTFB is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi Asia and TTFB Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTFB 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 Asia are associated (or correlated) with TTFB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTFB has no effect on the direction of Kura Sushi i.e., Kura Sushi and TTFB go up and down completely randomly.

Pair Corralation between Kura Sushi and TTFB

Assuming the 90 days trading horizon Kura Sushi Asia is expected to under-perform the TTFB. In addition to that, Kura Sushi is 5.33 times more volatile than TTFB Co. It trades about -0.09 of its total potential returns per unit of risk. TTFB Co is currently generating about -0.11 per unit of volatility. If you would invest  20,200  in TTFB Co on September 12, 2024 and sell it today you would lose (200.00) from holding TTFB Co or give up 0.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kura Sushi Asia  vs.  TTFB Co

Kura Sushi Asia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kura Sushi Asia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

TTFB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TTFB Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, TTFB is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Kura Sushi and TTFB

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

The idea behind Kura Sushi Asia and TTFB Co 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.