Correlation Between Chefs Warehouse and Colabor

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

By analyzing existing cross correlation between The Chefs Warehouse and Colabor Group, you can compare the effects of market volatilities on Chefs Warehouse and Colabor 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 Chefs Warehouse with a short position of Colabor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chefs Warehouse and Colabor.

Diversification Opportunities for Chefs Warehouse and Colabor

0.09

Correlation Coefficient

Chefs Warehouse  Colabor

Significant diversification

The 3 months correlation between Chefs and Colabor is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Chefs Warehouse and Colabor Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colabor Group and Chefs Warehouse 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 The Chefs Warehouse are associated (or correlated) with Colabor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colabor Group has no effect on the direction of Chefs Warehouse i.e., Chefs Warehouse and Colabor go up and down completely randomly.

Pair Corralation between Chefs Warehouse and Colabor

Given the investment horizon of 90 days The Chefs Warehouse is expected to generate 0.76 times more return on investment than Colabor. However, The Chefs Warehouse is 1.31 times less risky than Colabor. It trades about 0.09 of its potential returns per unit of risk. Colabor Group is currently generating about -0.03 per unit of risk. If you would invest  5,697  in The Chefs Warehouse on April 30, 2025 and sell it today you would earn a total of  571.00  from holding The Chefs Warehouse or generate 10.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

The Chefs Warehouse  vs.  Colabor Group

Chefs Warehouse

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Chefs Warehouse are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Chefs Warehouse may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Colabor Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Colabor Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Colabor is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Chefs Warehouse and Colabor

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

The idea behind The Chefs Warehouse and Colabor Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.