Correlation Between Roku and Chicken Soup

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

By analyzing existing cross correlation between Roku Inc and Chicken Soup For, you can compare the effects of market volatilities on Roku and Chicken Soup 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 Roku with a short position of Chicken Soup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and Chicken Soup.

Diversification Opportunities for Roku and Chicken Soup

0.0

Correlation Coefficient

Roku  Chicken Soup

Pay attention - limited upside

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

Pair Corralation between Roku and Chicken Soup

If you would invest  7,489  in Roku Inc on December 28, 2024 and sell it today you would lose (240.00) from holding Roku Inc or give up 3.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Roku Inc  vs.  Chicken Soup For

Roku Inc

Risk-Adjusted Performance

Weak

Over the last 90 days Roku Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Roku is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Chicken Soup For

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chicken Soup For has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Chicken Soup is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Roku and Chicken Soup

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

The idea behind Roku Inc and Chicken Soup For 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..