Correlation Between Ark Restaurants and Dutch Bros
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Dutch Bros 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 Ark Restaurants and Dutch Bros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ark Restaurants Corp and Dutch Bros, you can compare the effects of market volatilities on Ark Restaurants and Dutch Bros 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 Ark Restaurants with a short position of Dutch Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Dutch Bros.
Diversification Opportunities for Ark Restaurants and Dutch Bros
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ark and Dutch is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Dutch Bros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dutch Bros and Ark Restaurants 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 Ark Restaurants Corp are associated (or correlated) with Dutch Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dutch Bros has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Dutch Bros go up and down completely randomly.
Pair Corralation between Ark Restaurants and Dutch Bros
Given the investment horizon of 90 days Ark Restaurants Corp is expected to under-perform the Dutch Bros. But the stock apears to be less risky and, when comparing its historical volatility, Ark Restaurants Corp is 1.46 times less risky than Dutch Bros. The stock trades about -0.06 of its potential returns per unit of risk. The Dutch Bros is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,024 in Dutch Bros on August 31, 2024 and sell it today you would earn a total of 2,349 from holding Dutch Bros or generate 77.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.13% |
| Values | Daily Returns |
Ark Restaurants Corp vs. Dutch Bros
Performance |
| Timeline |
| Ark Restaurants Corp |
| Dutch Bros |
Ark Restaurants and Dutch Bros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ark Restaurants and Dutch Bros
The main advantage of trading using opposite Ark Restaurants and Dutch Bros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Dutch Bros 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 Dutch Bros will offset losses from the drop in Dutch Bros' long position.| Ark Restaurants vs. RLJ Lodging Trust | Ark Restaurants vs. Aquagold International | Ark Restaurants vs. Stepstone Group | Ark Restaurants vs. Morningstar Unconstrained Allocation |
| Dutch Bros vs. RLJ Lodging Trust | Dutch Bros vs. Aquagold International | Dutch Bros vs. Stepstone Group | Dutch Bros vs. Morningstar Unconstrained Allocation |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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