Correlation Between Kura Sushi and Direct Line
Can any of the company-specific risk be diversified away by investing in both Kura Sushi and Direct Line 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 Direct Line 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 Direct Line Insurance, you can compare the effects of market volatilities on Kura Sushi and Direct Line 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 Direct Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Sushi and Direct Line.
Diversification Opportunities for Kura Sushi and Direct Line
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kura and Direct is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA and Direct Line Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Line Insurance 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 Direct Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Line Insurance has no effect on the direction of Kura Sushi i.e., Kura Sushi and Direct Line go up and down completely randomly.
Pair Corralation between Kura Sushi and Direct Line
Given the investment horizon of 90 days Kura Sushi USA is expected to under-perform the Direct Line. In addition to that, Kura Sushi is 1.45 times more volatile than Direct Line Insurance. It trades about -0.04 of its total potential returns per unit of risk. Direct Line Insurance is currently generating about 0.09 per unit of volatility. If you would invest 942.00 in Direct Line Insurance on December 5, 2024 and sell it today you would earn a total of 532.00 from holding Direct Line Insurance or generate 56.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 84.96% |
Values | Daily Returns |
Kura Sushi USA vs. Direct Line Insurance
Performance |
Timeline |
Kura Sushi USA |
Direct Line Insurance |
Kura Sushi and Direct Line Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kura Sushi and Direct Line
The main advantage of trading using opposite Kura Sushi and Direct Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kura Sushi position performs unexpectedly, Direct Line 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 Direct Line will offset losses from the drop in Direct Line's long position.Kura Sushi vs. Brinker International | Kura Sushi vs. Dennys Corp | Kura Sushi vs. Bloomin Brands | Kura Sushi vs. Jack In The |
Direct Line vs. Brunswick | Direct Line vs. Sonos Inc | Direct Line vs. Ubisoft Entertainment | Direct Line vs. Sphere Entertainment Co |
Check out your portfolio center.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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