Correlation Between First Watch and 49327M3E2

Can any of the company-specific risk be diversified away by investing in both First Watch and 49327M3E2 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 49327M3E2 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 KEY 415 08 AUG 25, you can compare the effects of market volatilities on First Watch and 49327M3E2 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 49327M3E2. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and 49327M3E2.

Diversification Opportunities for First Watch and 49327M3E2

0.27

Correlation Coefficient

First Watch  49327M3E2

Modest diversification

The 3 months correlation between First and 49327M3E2 is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and KEY 415 08 AUG 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEY 415 08 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 49327M3E2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEY 415 08 has no effect on the direction of First Watch i.e., First Watch and 49327M3E2 go up and down completely randomly.

Pair Corralation between First Watch and 49327M3E2

Given the investment horizon of 90 days First Watch Restaurant is expected to under-perform the 49327M3E2. In addition to that, First Watch is 3.04 times more volatile than KEY 415 08 AUG 25. It trades about -0.08 of its total potential returns per unit of risk. KEY 415 08 AUG 25 is currently generating about -0.13 per unit of volatility. If you would invest  9,944  in KEY 415 08 AUG 25 on December 24, 2024 and sell it today you would lose (694.00) from holding KEY 415 08 AUG 25 or give up 6.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.16%
Values	Daily Returns

First Watch Restaurant  vs.  KEY 415 08 AUG 25

First Watch Restaurant

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Watch Restaurant has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

KEY 415 08

Risk-Adjusted Performance

Very Weak

Over the last 90 days KEY 415 08 AUG 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for KEY 415 08 AUG 25 investors.

Pair Trading with First Watch and 49327M3E2

The main advantage of trading using opposite First Watch and 49327M3E2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Watch position performs unexpectedly, 49327M3E2 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 49327M3E2 will offset losses from the drop in 49327M3E2's long position.

The idea behind First Watch Restaurant and KEY 415 08 AUG 25 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.