Correlation Between Good Times and Sadot

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

By analyzing existing cross correlation between Good Times Restaurants and Sadot Group, you can compare the effects of market volatilities on Good Times and Sadot 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 Good Times with a short position of Sadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Good Times and Sadot.

Diversification Opportunities for Good Times and Sadot

-0.2

Correlation Coefficient

Good Times  Sadot

Good diversification

The 3 months correlation between Good and Sadot is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Good Times Restaurants and Sadot Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sadot Group and Good Times 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 Good Times Restaurants are associated (or correlated) with Sadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sadot Group has no effect on the direction of Good Times i.e., Good Times and Sadot go up and down completely randomly.

Pair Corralation between Good Times and Sadot

Given the investment horizon of 90 days Good Times is expected to generate 61.65 times less return on investment than Sadot. But when comparing it to its historical volatility, Good Times Restaurants is 23.26 times less risky than Sadot. It trades about 0.02 of its potential returns per unit of risk. Sadot Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  783.00  in Sadot Group on September 13, 2024 and sell it today you would lose (396.00) from holding Sadot Group or give up 50.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Good Times Restaurants  vs.  Sadot Group

Good Times Restaurants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Good Times Restaurants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Sadot Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sadot Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Sadot unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Good Times and Sadot

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

The idea behind Good Times Restaurants and Sadot Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.