Correlation Between Kura Sushi and Alliance Recovery

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

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

Diversification Opportunities for Kura Sushi and Alliance Recovery

0.3

Correlation Coefficient

Kura Sushi  Alliance Recovery

Weak diversification

The 3 months correlation between Kura and Alliance is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA and Alliance Recovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Recovery and Kura Sushi 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 Kura Sushi USA are associated (or correlated) with Alliance Recovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Recovery has no effect on the direction of Kura Sushi i.e., Kura Sushi and Alliance Recovery go up and down completely randomly.

Pair Corralation between Kura Sushi and Alliance Recovery

Given the investment horizon of 90 days Kura Sushi USA is expected to generate 1.68 times more return on investment than Alliance Recovery. However, Kura Sushi is 1.68 times more volatile than Alliance Recovery. It trades about -0.05 of its potential returns per unit of risk. Alliance Recovery is currently generating about -0.13 per unit of risk. If you would invest  9,432  in Kura Sushi USA on October 25, 2024 and sell it today you would lose (1,400) from holding Kura Sushi USA or give up 14.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Kura Sushi USA  vs.  Alliance Recovery

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Alliance Recovery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliance Recovery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Kura Sushi and Alliance Recovery

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

The idea behind Kura Sushi USA and Alliance Recovery 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 Stocks Directory module to find actively traded stocks across global markets.