Correlation Between BJs Restaurants and Ark Restaurants
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants 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 BJs Restaurants and Ark Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Ark Restaurants Corp, you can compare the effects of market volatilities on BJs Restaurants 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 BJs Restaurants with a short position of Ark Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Ark Restaurants.
Diversification Opportunities for BJs Restaurants and Ark Restaurants
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BJs and Ark is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants 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 BJs 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 BJs Restaurants 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 BJs Restaurants i.e., BJs Restaurants and Ark Restaurants go up and down completely randomly.
Pair Corralation between BJs Restaurants and Ark Restaurants
Given the investment horizon of 90 days BJs Restaurants is expected to generate 0.53 times more return on investment than Ark Restaurants. However, BJs Restaurants is 1.88 times less risky than Ark Restaurants. It trades about -0.03 of its potential returns per unit of risk. Ark Restaurants Corp is currently generating about -0.31 per unit of risk. If you would invest 3,665 in BJs Restaurants on November 5, 2024 and sell it today you would lose (46.00) from holding BJs Restaurants or give up 1.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
BJs Restaurants vs. Ark Restaurants Corp
Performance |
| Timeline |
| BJs Restaurants |
| Ark Restaurants Corp |
BJs Restaurants and Ark Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Ark Restaurants
The main advantage of trading using opposite BJs Restaurants and Ark Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants 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.| BJs Restaurants vs. Chipotle Mexican Grill | BJs Restaurants vs. Dominos Pizza Common | BJs Restaurants vs. Yum Brands | BJs Restaurants vs. The Wendys Co |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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