Correlation Between Noble Romans and Chuys Holdings

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

By analyzing existing cross correlation between Noble Romans and Chuys Holdings, you can compare the effects of market volatilities on Noble Romans and Chuys Holdings 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 Noble Romans with a short position of Chuys Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Romans and Chuys Holdings.

Diversification Opportunities for Noble Romans and Chuys Holdings

-0.04

Correlation Coefficient

Noble Romans  Chuys Holdings

Good diversification

The 3 months correlation between Noble and Chuys is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Noble Romans and Chuys Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuys Holdings and Noble Romans 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 Noble Romans are associated (or correlated) with Chuys Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuys Holdings has no effect on the direction of Noble Romans i.e., Noble Romans and Chuys Holdings go up and down completely randomly.

Pair Corralation between Noble Romans and Chuys Holdings

Given the investment horizon of 90 days Noble Romans is expected to generate 2.81 times more return on investment than Chuys Holdings. However, Noble Romans is 2.81 times more volatile than Chuys Holdings. It trades about 0.04 of its potential returns per unit of risk. Chuys Holdings is currently generating about 0.02 per unit of risk. If you would invest  30.00  in Noble Romans on October 4, 2024 and sell it today you would earn a total of  5.00  from holding Noble Romans or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.69%
Values	Daily Returns

Noble Romans  vs.  Chuys Holdings

Noble Romans

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Noble Romans are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Noble Romans is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Chuys Holdings

Risk-Adjusted Performance

0 of 100

Market Crasher

Over the last 90 days Chuys Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Chuys Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Noble Romans and Chuys Holdings

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

The idea behind Noble Romans and Chuys Holdings 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.