Correlation Between Kura Sushi and Lake Resources

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

Diversification Opportunities for Kura Sushi and Lake Resources

0.33

Correlation Coefficient

Kura Sushi  Lake Resources

Weak diversification

The 3 months correlation between Kura and Lake is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA and Lake Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake Resources NL 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 Lake Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Resources NL has no effect on the direction of Kura Sushi i.e., Kura Sushi and Lake Resources go up and down completely randomly.

Pair Corralation between Kura Sushi and Lake Resources

Given the investment horizon of 90 days Kura Sushi USA is expected to under-perform the Lake Resources. But the stock apears to be less risky and, when comparing its historical volatility, Kura Sushi USA is 1.97 times less risky than Lake Resources. The stock trades about -0.22 of its potential returns per unit of risk. The Lake Resources NL is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2.70  in Lake Resources NL on December 19, 2024 and sell it today you would lose (0.50) from holding Lake Resources NL or give up 18.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Kura Sushi USA  vs.  Lake Resources NL

Kura Sushi USA

Risk-Adjusted Performance

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

Lake Resources NL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lake Resources NL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Lake Resources is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kura Sushi and Lake Resources

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

The idea behind Kura Sushi USA and Lake Resources NL 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.