Correlation Between Ark Restaurants and Domino’s Pizza
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Domino’s Pizza 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 Domino’s Pizza 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 Dominos Pizza Group, you can compare the effects of market volatilities on Ark Restaurants and Domino’s Pizza 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 Domino’s Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Domino’s Pizza.
Diversification Opportunities for Ark Restaurants and Domino’s Pizza
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ark and Domino’s is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Dominos Pizza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza Group 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 Domino’s Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza Group has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Domino’s Pizza go up and down completely randomly.
Pair Corralation between Ark Restaurants and Domino’s Pizza
Given the investment horizon of 90 days Ark Restaurants Corp is expected to generate 1.78 times more return on investment than Domino’s Pizza. However, Ark Restaurants is 1.78 times more volatile than Dominos Pizza Group. It trades about -0.01 of its potential returns per unit of risk. Dominos Pizza Group is currently generating about -0.03 per unit of risk. If you would invest 1,364 in Ark Restaurants Corp on December 4, 2024 and sell it today you would lose (282.00) from holding Ark Restaurants Corp or give up 20.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.31% |
| Values | Daily Returns |
Ark Restaurants Corp vs. Dominos Pizza Group
Performance |
| Timeline |
| Ark Restaurants Corp |
| Dominos Pizza Group |
Ark Restaurants and Domino’s Pizza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ark Restaurants and Domino’s Pizza
The main advantage of trading using opposite Ark Restaurants and Domino’s Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Domino’s Pizza 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 Domino’s Pizza will offset losses from the drop in Domino’s Pizza'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 |
| Domino’s Pizza vs. Direct Line Insurance | Domino’s Pizza vs. Molson Coors Brewing | Domino’s Pizza vs. Compania Cervecerias Unidas | Domino’s Pizza vs. Essent Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |