Correlation Between First Watch and Genocea Biosciences

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

By analyzing existing cross correlation between First Watch Restaurant and Genocea Biosciences, you can compare the effects of market volatilities on First Watch and Genocea Biosciences 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 First Watch with a short position of Genocea Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and Genocea Biosciences.

Diversification Opportunities for First Watch and Genocea Biosciences

0.0

Correlation Coefficient

First Watch  Genocea Biosciences

Pay attention - limited upside

The 3 months correlation between First and Genocea is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and Genocea Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genocea Biosciences and First Watch 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 First Watch Restaurant are associated (or correlated) with Genocea Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genocea Biosciences has no effect on the direction of First Watch i.e., First Watch and Genocea Biosciences go up and down completely randomly.

Pair Corralation between First Watch and Genocea Biosciences

If you would invest  1,653  in First Watch Restaurant on October 24, 2024 and sell it today you would earn a total of  239.00  from holding First Watch Restaurant or generate 14.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

First Watch Restaurant  vs.  Genocea Biosciences

First Watch Restaurant

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in First Watch Restaurant are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, First Watch reported solid returns over the last few months and may actually be approaching a breakup point.

Genocea Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genocea Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Genocea Biosciences is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with First Watch and Genocea Biosciences

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

The idea behind First Watch Restaurant and Genocea Biosciences 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.