Correlation Between Ark Restaurants and Spot Coffee
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Spot Coffee 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 Spot Coffee 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 Spot Coffee, you can compare the effects of market volatilities on Ark Restaurants and Spot Coffee 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 Spot Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Spot Coffee.
Diversification Opportunities for Ark Restaurants and Spot Coffee
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ark and Spot is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Spot Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spot Coffee 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 Spot Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spot Coffee has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Spot Coffee go up and down completely randomly.
Pair Corralation between Ark Restaurants and Spot Coffee
Given the investment horizon of 90 days Ark Restaurants Corp is expected to under-perform the Spot Coffee. But the stock apears to be less risky and, when comparing its historical volatility, Ark Restaurants Corp is 26.63 times less risky than Spot Coffee. The stock trades about -0.04 of its potential returns per unit of risk. The Spot Coffee is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4.50 in Spot Coffee on September 3, 2024 and sell it today you would lose (4.30) from holding Spot Coffee or give up 95.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.59% |
| Values | Daily Returns |
Ark Restaurants Corp vs. Spot Coffee
Performance |
| Timeline |
| Ark Restaurants Corp |
| Spot Coffee |
Ark Restaurants and Spot Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ark Restaurants and Spot Coffee
The main advantage of trading using opposite Ark Restaurants and Spot Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Spot Coffee 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 Spot Coffee will offset losses from the drop in Spot Coffee's long position.| Ark Restaurants vs. Highway Holdings Limited | Ark Restaurants vs. QCR Holdings | Ark Restaurants vs. Partner Communications | Ark Restaurants vs. Acumen Pharmaceuticals |
| Spot Coffee vs. Arhaus Inc | Spot Coffee vs. Floor Decor Holdings | Spot Coffee vs. Live Ventures | Spot Coffee vs. Cisco Systems |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |