Correlation Between Ark Restaurants and Compass Group
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Compass Group 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 Compass Group 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 Compass Group PLC, you can compare the effects of market volatilities on Ark Restaurants and Compass Group 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 Compass Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Compass Group.
Diversification Opportunities for Ark Restaurants and Compass Group
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ark and Compass is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Compass Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Group PLC 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 Compass Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Group PLC has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Compass Group go up and down completely randomly.
Pair Corralation between Ark Restaurants and Compass Group
Given the investment horizon of 90 days Ark Restaurants Corp is expected to under-perform the Compass Group. In addition to that, Ark Restaurants is 2.45 times more volatile than Compass Group PLC. It trades about 0.0 of its total potential returns per unit of risk. Compass Group PLC is currently generating about 0.09 per unit of volatility. If you would invest 2,240 in Compass Group PLC on September 14, 2024 and sell it today you would earn a total of 1,191 from holding Compass Group PLC or generate 53.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.58% |
| Values | Daily Returns |
Ark Restaurants Corp vs. Compass Group PLC
Performance |
| Timeline |
| Ark Restaurants Corp |
| Compass Group PLC |
Ark Restaurants and Compass Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ark Restaurants and Compass Group
The main advantage of trading using opposite Ark Restaurants and Compass Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Compass Group 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 Compass Group will offset losses from the drop in Compass Group'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 |
| Compass Group vs. Jollibee Foods Corp | Compass Group vs. Nathans Famous | Compass Group vs. Good Times Restaurants | Compass Group vs. Wingstop |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |