Correlation Between Good Times and Full House

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

By analyzing existing cross correlation between Good Times Restaurants and Full House Resorts, you can compare the effects of market volatilities on Good Times and Full House 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 Good Times with a short position of Full House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Good Times and Full House.

Diversification Opportunities for Good Times and Full House

-0.55

Correlation Coefficient

Good Times  Full House

Excellent diversification

The 3 months correlation between Good and Full is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Good Times Restaurants and Full House Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Full House Resorts and Good Times 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 Good Times Restaurants are associated (or correlated) with Full House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Full House Resorts has no effect on the direction of Good Times i.e., Good Times and Full House go up and down completely randomly.

Pair Corralation between Good Times and Full House

Given the investment horizon of 90 days Good Times Restaurants is expected to under-perform the Full House. But the stock apears to be less risky and, when comparing its historical volatility, Good Times Restaurants is 1.36 times less risky than Full House. The stock trades about -0.17 of its potential returns per unit of risk. The Full House Resorts is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  324.00  in Full House Resorts on May 5, 2025 and sell it today you would earn a total of  118.00  from holding Full House Resorts or generate 36.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Good Times Restaurants  vs.  Full House Resorts

Good Times Restaurants

Risk-Adjusted Performance

Very Weak

Over the last 90 days Good Times Restaurants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Full House Resorts

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Full House Resorts are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Full House disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Good Times and Full House

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

The idea behind Good Times Restaurants and Full House Resorts 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.