Correlation Between Arhaus and ATRenew
Can any of the company-specific risk be diversified away by investing in both Arhaus and ATRenew 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 Arhaus and ATRenew into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arhaus Inc and ATRenew Inc DRC, you can compare the effects of market volatilities on Arhaus and ATRenew 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 Arhaus with a short position of ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arhaus and ATRenew.
Diversification Opportunities for Arhaus and ATRenew
Good diversification
The 3 months correlation between Arhaus and ATRenew is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Arhaus Inc and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC and Arhaus 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 Arhaus Inc are associated (or correlated) with ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Arhaus i.e., Arhaus and ATRenew go up and down completely randomly.
Pair Corralation between Arhaus and ATRenew
Given the investment horizon of 90 days Arhaus is expected to generate 1.97 times less return on investment than ATRenew. But when comparing it to its historical volatility, Arhaus Inc is 1.59 times less risky than ATRenew. It trades about 0.05 of its potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 273.00 in ATRenew Inc DRC on September 13, 2024 and sell it today you would earn a total of 24.00 from holding ATRenew Inc DRC or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arhaus Inc vs. ATRenew Inc DRC
Performance |
| Timeline |
| Arhaus Inc |
| ATRenew Inc DRC |
Arhaus and ATRenew Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arhaus and ATRenew
The main advantage of trading using opposite Arhaus and ATRenew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arhaus position performs unexpectedly, ATRenew 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 ATRenew will offset losses from the drop in ATRenew's long position.| Arhaus vs. Floor Decor Holdings | Arhaus vs. Live Ventures | Arhaus vs. Home Depot | Arhaus vs. Lowes Companies |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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