Correlation Between Barnes Noble and Arko Corp
Can any of the company-specific risk be diversified away by investing in both Barnes Noble and Arko Corp 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 Barnes Noble and Arko Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Noble Education and Arko Corp, you can compare the effects of market volatilities on Barnes Noble and Arko Corp 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 Barnes Noble with a short position of Arko Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes Noble and Arko Corp.
Diversification Opportunities for Barnes Noble and Arko Corp
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barnes and Arko is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Noble Education and Arko Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arko Corp and Barnes Noble 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 Barnes Noble Education are associated (or correlated) with Arko Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arko Corp has no effect on the direction of Barnes Noble i.e., Barnes Noble and Arko Corp go up and down completely randomly.
Pair Corralation between Barnes Noble and Arko Corp
Given the investment horizon of 90 days Barnes Noble Education is expected to generate 3.15 times more return on investment than Arko Corp. However, Barnes Noble is 3.15 times more volatile than Arko Corp. It trades about 0.05 of its potential returns per unit of risk. Arko Corp is currently generating about 0.07 per unit of risk. If you would invest 1,017 in Barnes Noble Education on August 28, 2024 and sell it today you would earn a total of 21.00 from holding Barnes Noble Education or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barnes Noble Education vs. Arko Corp
Performance |
| Timeline |
| Barnes Noble Education |
| Arko Corp |
Barnes Noble and Arko Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes Noble and Arko Corp
The main advantage of trading using opposite Barnes Noble and Arko Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes Noble position performs unexpectedly, Arko Corp 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 Arko Corp will offset losses from the drop in Arko Corp's long position.| Barnes Noble vs. Sportsmans | Barnes Noble vs. MarineMax | Barnes Noble vs. Build A Bear Workshop | Barnes Noble vs. Leslies |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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