Correlation Between First Watch and Repligen

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

Diversification Opportunities for First Watch and Repligen

0.18

Correlation Coefficient

First Watch  Repligen

Average diversification

The 3 months correlation between First and Repligen is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen 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 Repligen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repligen has no effect on the direction of First Watch i.e., First Watch and Repligen go up and down completely randomly.

Pair Corralation between First Watch and Repligen

Given the investment horizon of 90 days First Watch Restaurant is expected to generate 1.02 times more return on investment than Repligen. However, First Watch is 1.02 times more volatile than Repligen. It trades about 0.11 of its potential returns per unit of risk. Repligen is currently generating about 0.11 per unit of risk. If you would invest  1,721  in First Watch Restaurant on September 4, 2024 and sell it today you would earn a total of  143.00  from holding First Watch Restaurant or generate 8.31% return on investment over 90 days.

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

First Watch Restaurant  vs.  Repligen

First Watch Restaurant

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Watch Restaurant are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, First Watch reported solid returns over the last few months and may actually be approaching a breakup point.

Repligen

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Repligen are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Repligen may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with First Watch and Repligen

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

The idea behind First Watch Restaurant and Repligen 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.