Correlation Between Ruths Hospitality and Wingstop

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

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

Diversification Opportunities for Ruths Hospitality and Wingstop

0.0

Correlation Coefficient

Ruths Hospitality  Wingstop

Pay attention - limited upside

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

Pair Corralation between Ruths Hospitality and Wingstop

If you would invest (100.00) in Ruths Hospitality Group on January 18, 2025 and sell it today you would earn a total of  100.00  from holding Ruths Hospitality Group or generate -100.0% return on investment over 90 days.

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

Ruths Hospitality Group  vs.  Wingstop

Ruths Hospitality

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ruths Hospitality Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Ruths Hospitality is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Wingstop

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wingstop has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ruths Hospitality and Wingstop

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

The idea behind Ruths Hospitality Group and Wingstop 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.