Correlation Between Card Factory and Arko Corp
Can any of the company-specific risk be diversified away by investing in both Card Factory 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 Card Factory and Arko Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Card Factory plc and Arko Corp, you can compare the effects of market volatilities on Card Factory 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 Card Factory with a short position of Arko Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Card Factory and Arko Corp.
Diversification Opportunities for Card Factory and Arko Corp
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Card and Arko is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Card Factory plc and Arko Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arko Corp and Card Factory 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 Card Factory plc 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 Card Factory i.e., Card Factory and Arko Corp go up and down completely randomly.
Pair Corralation between Card Factory and Arko Corp
Assuming the 90 days horizon Card Factory plc is expected to under-perform the Arko Corp. In addition to that, Card Factory is 2.06 times more volatile than Arko Corp. It trades about -0.19 of its total potential returns per unit of risk. Arko Corp is currently generating about 0.1 per unit of volatility. If you would invest 688.00 in Arko Corp on August 30, 2024 and sell it today you would earn a total of 33.00 from holding Arko Corp or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Card Factory plc vs. Arko Corp
Performance |
| Timeline |
| Card Factory plc |
| Arko Corp |
Card Factory and Arko Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Card Factory and Arko Corp
The main advantage of trading using opposite Card Factory and Arko Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Card Factory 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.| Card Factory vs. Dixons Carphone plc | Card Factory vs. Ceconomy AG ADR | Card Factory vs. Tandy Leather Factory | Card Factory vs. Green River Gold |
| Arko Corp vs. Murphy USA | Arko Corp vs. National Vision Holdings | Arko Corp vs. ODP Corp | Arko Corp vs. Genuine Parts Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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