Correlation Between Rush Street and Ark Restaurants
Can any of the company-specific risk be diversified away by investing in both Rush Street 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 Rush Street and Ark Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rush Street Interactive and Ark Restaurants Corp, you can compare the effects of market volatilities on Rush Street 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 Rush Street with a short position of Ark Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Ark Restaurants.
Diversification Opportunities for Rush Street and Ark Restaurants
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rush and Ark is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive 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 Rush Street 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 Rush Street Interactive 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 Rush Street i.e., Rush Street and Ark Restaurants go up and down completely randomly.
Pair Corralation between Rush Street and Ark Restaurants
Considering the 90-day investment horizon Rush Street Interactive is expected to generate 1.14 times more return on investment than Ark Restaurants. However, Rush Street is 1.14 times more volatile than Ark Restaurants Corp. It trades about 0.15 of its potential returns per unit of risk. Ark Restaurants Corp is currently generating about -0.11 per unit of risk. If you would invest 875.00 in Rush Street Interactive on September 2, 2024 and sell it today you would earn a total of 567.00 from holding Rush Street Interactive or generate 64.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Rush Street Interactive vs. Ark Restaurants Corp
Performance |
| Timeline |
| Rush Street Interactive |
| Ark Restaurants Corp |
Rush Street and Ark Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Ark Restaurants
The main advantage of trading using opposite Rush Street and Ark Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street 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.The idea behind Rush Street Interactive and Ark Restaurants Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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