Correlation Between Ark Restaurants and Sweetgreen
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Sweetgreen 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 Sweetgreen 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 Sweetgreen, you can compare the effects of market volatilities on Ark Restaurants and Sweetgreen 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 Sweetgreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Sweetgreen.
Diversification Opportunities for Ark Restaurants and Sweetgreen
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ark and Sweetgreen is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen 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 Sweetgreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweetgreen has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Sweetgreen go up and down completely randomly.
Pair Corralation between Ark Restaurants and Sweetgreen
Given the investment horizon of 90 days Ark Restaurants Corp is expected to under-perform the Sweetgreen. But the stock apears to be less risky and, when comparing its historical volatility, Ark Restaurants Corp is 2.6 times less risky than Sweetgreen. The stock trades about -0.41 of its potential returns per unit of risk. The Sweetgreen is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,689 in Sweetgreen on August 24, 2024 and sell it today you would earn a total of 436.00 from holding Sweetgreen or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ark Restaurants Corp vs. Sweetgreen
Performance |
| Timeline |
| Ark Restaurants Corp |
| Sweetgreen |
Ark Restaurants and Sweetgreen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ark Restaurants and Sweetgreen
The main advantage of trading using opposite Ark Restaurants and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Sweetgreen 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 Sweetgreen will offset losses from the drop in Sweetgreen's long position.| Ark Restaurants vs. Chipotle Mexican Grill | Ark Restaurants vs. Eshallgo Class A | Ark Restaurants vs. Amtech Systems | Ark Restaurants vs. Gold Fields Ltd |
| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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