Correlation Between Biglari Holdings and Ark Restaurants
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Ark Restaurants 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 Biglari Holdings and Ark Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Ark Restaurants Corp, you can compare the effects of market volatilities on Biglari Holdings and Ark Restaurants 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 Biglari Holdings with a short position of Ark Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Ark Restaurants.
Diversification Opportunities for Biglari Holdings and Ark Restaurants
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biglari and Ark is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Ark Restaurants Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ark Restaurants Corp and Biglari Holdings 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 Biglari Holdings are associated (or correlated) with Ark Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ark Restaurants Corp has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Ark Restaurants go up and down completely randomly.
Pair Corralation between Biglari Holdings and Ark Restaurants
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 1.84 times more return on investment than Ark Restaurants. However, Biglari Holdings is 1.84 times more volatile than Ark Restaurants Corp. It trades about 0.31 of its potential returns per unit of risk. Ark Restaurants Corp is currently generating about -0.32 per unit of risk. If you would invest 17,261 in Biglari Holdings on August 28, 2024 and sell it today you would earn a total of 3,437 from holding Biglari Holdings or generate 19.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Ark Restaurants Corp
Performance |
| Timeline |
| Biglari Holdings |
| Ark Restaurants Corp |
Biglari Holdings and Ark Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Ark Restaurants
The main advantage of trading using opposite Biglari Holdings and Ark Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Ark Restaurants 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 Ark Restaurants will offset losses from the drop in Ark Restaurants' long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Ark Restaurants vs. Nathans Famous | Ark Restaurants vs. Flanigans Enterprises | Ark Restaurants vs. Good Times Restaurants | Ark Restaurants vs. Auburn National Bancorporation |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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