Correlation Between Definitive Healthcare and Kura Sushi

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

By analyzing existing cross correlation between Definitive Healthcare Corp and Kura Sushi USA, you can compare the effects of market volatilities on Definitive Healthcare and Kura Sushi 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 Definitive Healthcare with a short position of Kura Sushi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Definitive Healthcare and Kura Sushi.

Diversification Opportunities for Definitive Healthcare and Kura Sushi

0.6

Correlation Coefficient

Definitive Healthcare  Kura Sushi

Poor diversification

The 3 months correlation between Definitive and Kura is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and Kura Sushi USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kura Sushi USA and Definitive Healthcare 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 Definitive Healthcare Corp are associated (or correlated) with Kura Sushi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kura Sushi USA has no effect on the direction of Definitive Healthcare i.e., Definitive Healthcare and Kura Sushi go up and down completely randomly.

Pair Corralation between Definitive Healthcare and Kura Sushi

Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to generate 0.63 times more return on investment than Kura Sushi. However, Definitive Healthcare Corp is 1.59 times less risky than Kura Sushi. It trades about -0.1 of its potential returns per unit of risk. Kura Sushi USA is currently generating about -0.23 per unit of risk. If you would invest  416.00  in Definitive Healthcare Corp on October 23, 2024 and sell it today you would lose (22.00) from holding Definitive Healthcare Corp or give up 5.29% of portfolio value over 90 days.

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

Definitive Healthcare Corp  vs.  Kura Sushi USA

Definitive Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Definitive Healthcare Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Kura Sushi USA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kura Sushi USA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Definitive Healthcare and Kura Sushi

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

The idea behind Definitive Healthcare Corp and Kura Sushi USA 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.