Correlation Between Spot Coffee and Ark Restaurants
Can any of the company-specific risk be diversified away by investing in both Spot Coffee 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 Spot Coffee and Ark Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spot Coffee and Ark Restaurants Corp, you can compare the effects of market volatilities on Spot Coffee 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 Spot Coffee with a short position of Ark Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spot Coffee and Ark Restaurants.
Diversification Opportunities for Spot Coffee and Ark Restaurants
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Spot and Ark is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Spot Coffee 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 Spot Coffee 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 Spot Coffee 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 Spot Coffee i.e., Spot Coffee and Ark Restaurants go up and down completely randomly.
Pair Corralation between Spot Coffee and Ark Restaurants
Assuming the 90 days horizon Spot Coffee is expected to generate 26.63 times more return on investment than Ark Restaurants. However, Spot Coffee is 26.63 times more volatile than Ark Restaurants Corp. It trades about 0.09 of its potential returns per unit of risk. Ark Restaurants Corp is currently generating about -0.04 per unit of risk. If you would invest 4.50 in Spot Coffee on September 3, 2024 and sell it today you would lose (4.30) from holding Spot Coffee or give up 95.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.59% |
| Values | Daily Returns |
Spot Coffee vs. Ark Restaurants Corp
Performance |
| Timeline |
| Spot Coffee |
| Ark Restaurants Corp |
Spot Coffee and Ark Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spot Coffee and Ark Restaurants
The main advantage of trading using opposite Spot Coffee and Ark Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spot Coffee 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.| Spot Coffee vs. Arhaus Inc | Spot Coffee vs. Floor Decor Holdings | Spot Coffee vs. Live Ventures | Spot Coffee vs. Cisco Systems |
| Ark Restaurants vs. Highway Holdings Limited | Ark Restaurants vs. QCR Holdings | Ark Restaurants vs. Partner Communications | Ark Restaurants vs. Acumen Pharmaceuticals |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |