Correlation Between Ark Restaurants and Catheter Precision
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Catheter Precision 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 Catheter Precision 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 Catheter Precision, you can compare the effects of market volatilities on Ark Restaurants and Catheter Precision 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 Catheter Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Catheter Precision.
Diversification Opportunities for Ark Restaurants and Catheter Precision
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ark and Catheter is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Catheter Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catheter Precision 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 Catheter Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catheter Precision has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Catheter Precision go up and down completely randomly.
Pair Corralation between Ark Restaurants and Catheter Precision
Given the investment horizon of 90 days Ark Restaurants Corp is expected to generate 0.32 times more return on investment than Catheter Precision. However, Ark Restaurants Corp is 3.15 times less risky than Catheter Precision. It trades about -0.03 of its potential returns per unit of risk. Catheter Precision is currently generating about -0.07 per unit of risk. If you would invest 1,854 in Ark Restaurants Corp on September 27, 2024 and sell it today you would lose (754.00) from holding Ark Restaurants Corp or give up 40.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.53% |
Values | Daily Returns |
Ark Restaurants Corp vs. Catheter Precision
Performance |
Timeline |
Ark Restaurants Corp |
Catheter Precision |
Ark Restaurants and Catheter Precision Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ark Restaurants and Catheter Precision
The main advantage of trading using opposite Ark Restaurants and Catheter Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Catheter Precision 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 Catheter Precision will offset losses from the drop in Catheter Precision's long position.Ark Restaurants vs. Nathans Famous | ||
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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