Correlation Between Ark Restaurants and Canopy Growth
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Canopy Growth 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 Canopy Growth 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 Canopy Growth Corp, you can compare the effects of market volatilities on Ark Restaurants and Canopy Growth 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 Canopy Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Canopy Growth.
Diversification Opportunities for Ark Restaurants and Canopy Growth
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ark and Canopy is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Canopy Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canopy Growth Corp 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 Canopy Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canopy Growth Corp has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Canopy Growth go up and down completely randomly.
Pair Corralation between Ark Restaurants and Canopy Growth
Given the investment horizon of 90 days Ark Restaurants Corp is expected to generate 0.28 times more return on investment than Canopy Growth. However, Ark Restaurants Corp is 3.59 times less risky than Canopy Growth. It trades about -0.21 of its potential returns per unit of risk. Canopy Growth Corp is currently generating about -0.19 per unit of risk. If you would invest 1,227 in Ark Restaurants Corp on December 4, 2024 and sell it today you would lose (145.00) from holding Ark Restaurants Corp or give up 11.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ark Restaurants Corp vs. Canopy Growth Corp
Performance |
| Timeline |
| Ark Restaurants Corp |
| Canopy Growth Corp |
Ark Restaurants and Canopy Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ark Restaurants and Canopy Growth
The main advantage of trading using opposite Ark Restaurants and Canopy Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Canopy Growth 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 Canopy Growth will offset losses from the drop in Canopy Growth's long position.| Ark Restaurants vs. Nathans Famous | Ark Restaurants vs. Flanigans Enterprises | Ark Restaurants vs. Good Times Restaurants | Ark Restaurants vs. Auburn National Bancorporation |
| Canopy Growth vs. BioNTech SE | Canopy Growth vs. Arm Holdings plc | Canopy Growth vs. Teradyne | Canopy Growth vs. Vishay Intertechnology |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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