Correlation Between Ark Restaurants and Churchill Downs
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Churchill Downs 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 Churchill Downs 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 Churchill Downs Incorporated, you can compare the effects of market volatilities on Ark Restaurants and Churchill Downs 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 Churchill Downs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Churchill Downs.
Diversification Opportunities for Ark Restaurants and Churchill Downs
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ark and Churchill is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Churchill Downs Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Downs 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 Churchill Downs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Downs has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Churchill Downs go up and down completely randomly.
Pair Corralation between Ark Restaurants and Churchill Downs
Given the investment horizon of 90 days Ark Restaurants Corp is expected to under-perform the Churchill Downs. But the stock apears to be less risky and, when comparing its historical volatility, Ark Restaurants Corp is 1.27 times less risky than Churchill Downs. The stock trades about -0.32 of its potential returns per unit of risk. The Churchill Downs Incorporated is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14,117 in Churchill Downs Incorporated on August 28, 2024 and sell it today you would earn a total of 66.00 from holding Churchill Downs Incorporated or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ark Restaurants Corp vs. Churchill Downs Incorporated
Performance |
| Timeline |
| Ark Restaurants Corp |
| Churchill Downs |
Ark Restaurants and Churchill Downs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ark Restaurants and Churchill Downs
The main advantage of trading using opposite Ark Restaurants and Churchill Downs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Churchill Downs 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 Churchill Downs will offset losses from the drop in Churchill Downs' long position.| Ark Restaurants vs. Nathans Famous | Ark Restaurants vs. Flanigans Enterprises | Ark Restaurants vs. Good Times Restaurants | Ark Restaurants vs. Auburn National Bancorporation |
| Churchill Downs vs. Accel Entertainment | Churchill Downs vs. PlayAGS | Churchill Downs vs. International Game Technology | Churchill Downs vs. Everi Holdings |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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