Correlation Between Kura Sushi and Liberty Resources

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

Diversification Opportunities for Kura Sushi and Liberty Resources

0.0

Correlation Coefficient

Kura Sushi  Liberty Resources

Pay attention - limited upside

The 3 months correlation between Kura and Liberty is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA and Liberty Resources Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Resources 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 Liberty Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Resources has no effect on the direction of Kura Sushi i.e., Kura Sushi and Liberty Resources go up and down completely randomly.

Pair Corralation between Kura Sushi and Liberty Resources

Given the investment horizon of 90 days Kura Sushi is expected to generate 7.05 times less return on investment than Liberty Resources. But when comparing it to its historical volatility, Kura Sushi USA is 3.6 times less risky than Liberty Resources. It trades about 0.03 of its potential returns per unit of risk. Liberty Resources Acquisition is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  6.50  in Liberty Resources Acquisition on October 23, 2024 and sell it today you would lose (1.50) from holding Liberty Resources Acquisition or give up 23.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	23.89%
Values	Daily Returns

Kura Sushi USA  vs.  Liberty Resources Acquisition

Kura Sushi USA

Risk-Adjusted Performance

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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 fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Liberty Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Resources Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Liberty Resources is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Kura Sushi and Liberty Resources

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

The idea behind Kura Sushi USA and Liberty Resources Acquisition 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.