Correlation Between Ark Restaurants and Nathans Famous
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Nathans Famous 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 Nathans Famous 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 Nathans Famous, you can compare the effects of market volatilities on Ark Restaurants and Nathans Famous 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 Nathans Famous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Nathans Famous.
Diversification Opportunities for Ark Restaurants and Nathans Famous
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ark and Nathans is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Nathans Famous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nathans Famous 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 Nathans Famous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nathans Famous has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Nathans Famous go up and down completely randomly.
Pair Corralation between Ark Restaurants and Nathans Famous
Given the investment horizon of 90 days Ark Restaurants Corp is expected to generate 3.45 times more return on investment than Nathans Famous. However, Ark Restaurants is 3.45 times more volatile than Nathans Famous. It trades about 0.06 of its potential returns per unit of risk. Nathans Famous is currently generating about 0.1 per unit of risk. If you would invest 1,276 in Ark Restaurants Corp on November 3, 2024 and sell it today you would earn a total of 55.00 from holding Ark Restaurants Corp or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ark Restaurants Corp vs. Nathans Famous
Performance |
| Timeline |
| Ark Restaurants Corp |
| Nathans Famous |
Ark Restaurants and Nathans Famous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ark Restaurants and Nathans Famous
The main advantage of trading using opposite Ark Restaurants and Nathans Famous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Nathans Famous 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 Nathans Famous will offset losses from the drop in Nathans Famous' long position.| Ark Restaurants vs. Nathans Famous | Ark Restaurants vs. Flanigans Enterprises | Ark Restaurants vs. Good Times Restaurants | Ark Restaurants vs. Auburn National Bancorporation |
| Nathans Famous vs. Noble Romans | Nathans Famous vs. Good Times Restaurants | Nathans Famous vs. Bagger Daves Burger | Nathans Famous vs. Flanigans Enterprises |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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