Correlation Between 694308KC0 and First Watch

Can any of the company-specific risk be diversified away by investing in both 694308KC0 and First Watch 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 694308KC0 and First Watch into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PCG 44 01 MAR 32 and First Watch Restaurant, you can compare the effects of market volatilities on 694308KC0 and First Watch 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 694308KC0 with a short position of First Watch. Check out your portfolio center. Please also check ongoing floating volatility patterns of 694308KC0 and First Watch.

Diversification Opportunities for 694308KC0 and First Watch

-0.31

Correlation Coefficient

694308KC0  First Watch

Very good diversification

The 3 months correlation between 694308KC0 and First is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PCG 44 01 MAR 32 and First Watch Restaurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Watch Restaurant and 694308KC0 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 PCG 44 01 MAR 32 are associated (or correlated) with First Watch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Watch Restaurant has no effect on the direction of 694308KC0 i.e., 694308KC0 and First Watch go up and down completely randomly.

Pair Corralation between 694308KC0 and First Watch

Assuming the 90 days trading horizon PCG 44 01 MAR 32 is expected to under-perform the First Watch. But the bond apears to be less risky and, when comparing its historical volatility, PCG 44 01 MAR 32 is 1.75 times less risky than First Watch. The bond trades about -0.02 of its potential returns per unit of risk. The First Watch Restaurant is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,576  in First Watch Restaurant on October 23, 2024 and sell it today you would earn a total of  311.00  from holding First Watch Restaurant or generate 19.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.63%
Values	Daily Returns

PCG 44 01 MAR 32  vs.  First Watch Restaurant

PCG 44 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PCG 44 01 MAR 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for PCG 44 01 MAR 32 investors.

First Watch Restaurant

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First Watch Restaurant are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, First Watch may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with 694308KC0 and First Watch

The main advantage of trading using opposite 694308KC0 and First Watch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 694308KC0 position performs unexpectedly, First Watch 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 First Watch will offset losses from the drop in First Watch's long position.

The idea behind PCG 44 01 MAR 32 and First Watch Restaurant 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.