Correlation Between Ark Restaurants and Red Robin
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Red Robin 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 Red Robin 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 Red Robin Gourmet, you can compare the effects of market volatilities on Ark Restaurants and Red Robin 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 Red Robin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Red Robin.
Diversification Opportunities for Ark Restaurants and Red Robin
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ark and Red is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Red Robin Gourmet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Robin Gourmet 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 Red Robin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Robin Gourmet has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Red Robin go up and down completely randomly.
Pair Corralation between Ark Restaurants and Red Robin
Given the investment horizon of 90 days Ark Restaurants Corp is expected to under-perform the Red Robin. But the stock apears to be less risky and, when comparing its historical volatility, Ark Restaurants Corp is 1.92 times less risky than Red Robin. The stock trades about -0.03 of its potential returns per unit of risk. The Red Robin Gourmet is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 636.00 in Red Robin Gourmet on August 28, 2024 and sell it today you would lose (88.00) from holding Red Robin Gourmet or give up 13.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.53% |
| Values | Daily Returns |
Ark Restaurants Corp vs. Red Robin Gourmet
Performance |
| Timeline |
| Ark Restaurants Corp |
| Red Robin Gourmet |
Ark Restaurants and Red Robin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ark Restaurants and Red Robin
The main advantage of trading using opposite Ark Restaurants and Red Robin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Red Robin 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 Red Robin will offset losses from the drop in Red Robin'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 |
| Red Robin vs. Dine Brands Global | Red Robin vs. Bloomin Brands | Red Robin vs. BJs Restaurants | Red Robin vs. The Cheesecake Factory |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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