Correlation Between Various Eateries and Churchill Downs
Can any of the company-specific risk be diversified away by investing in both Various Eateries and Churchill Downs 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 Various Eateries and Churchill Downs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Various Eateries PLC and Churchill Downs Incorporated, you can compare the effects of market volatilities on Various Eateries and Churchill Downs 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 Various Eateries with a short position of Churchill Downs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Various Eateries and Churchill Downs.
Diversification Opportunities for Various Eateries and Churchill Downs
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Various and Churchill is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Various Eateries PLC and Churchill Downs Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Downs and Various Eateries 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 Various Eateries PLC are associated (or correlated) with Churchill Downs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Downs has no effect on the direction of Various Eateries i.e., Various Eateries and Churchill Downs go up and down completely randomly.
Pair Corralation between Various Eateries and Churchill Downs
Assuming the 90 days trading horizon Various Eateries PLC is expected to under-perform the Churchill Downs. But the stock apears to be less risky and, when comparing its historical volatility, Various Eateries PLC is 1.1 times less risky than Churchill Downs. The stock trades about -0.05 of its potential returns per unit of risk. The Churchill Downs Incorporated is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 13,136 in Churchill Downs Incorporated on August 21, 2025 and sell it today you would lose (2,844) from holding Churchill Downs Incorporated or give up 21.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.32% |
| Values | Daily Returns |
Various Eateries PLC vs. Churchill Downs Incorporated
Performance |
| Timeline |
| Various Eateries PLC |
| Churchill Downs |
Various Eateries and Churchill Downs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Various Eateries and Churchill Downs
The main advantage of trading using opposite Various Eateries and Churchill Downs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Various Eateries position performs unexpectedly, Churchill Downs 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 Churchill Downs will offset losses from the drop in Churchill Downs' long position.| Various Eateries vs. Toyota Motor Corp | Various Eateries vs. SoftBank Group Corp | Various Eateries vs. Nintendo Co | Various Eateries vs. Fannie Mae |
| Churchill Downs vs. Light Wonder | Churchill Downs vs. Boyd Gaming | Churchill Downs vs. Mohawk Industries | Churchill Downs vs. Vail Resorts |
Check out your portfolio center.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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