Correlation Between Ark Restaurants and Scilex Holding
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Scilex Holding 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 Scilex Holding 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 Scilex Holding, you can compare the effects of market volatilities on Ark Restaurants and Scilex Holding 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 Scilex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Scilex Holding.
Diversification Opportunities for Ark Restaurants and Scilex Holding
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ark and Scilex is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Scilex Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scilex Holding 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 Scilex Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scilex Holding has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Scilex Holding go up and down completely randomly.
Pair Corralation between Ark Restaurants and Scilex Holding
Given the investment horizon of 90 days Ark Restaurants Corp is expected to under-perform the Scilex Holding. But the stock apears to be less risky and, when comparing its historical volatility, Ark Restaurants Corp is 15.64 times less risky than Scilex Holding. The stock trades about -0.3 of its potential returns per unit of risk. The Scilex Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 28.00 in Scilex Holding on August 29, 2024 and sell it today you would lose (1.00) from holding Scilex Holding or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ark Restaurants Corp vs. Scilex Holding
Performance |
| Timeline |
| Ark Restaurants Corp |
| Scilex Holding |
Ark Restaurants and Scilex Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ark Restaurants and Scilex Holding
The main advantage of trading using opposite Ark Restaurants and Scilex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Scilex Holding 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 Scilex Holding will offset losses from the drop in Scilex Holding'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 |
| Scilex Holding vs. Vince Holding Corp | Scilex Holding vs. Citi Trends | Scilex Holding vs. Under Armour C | Scilex Holding vs. SEI Investments |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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