Correlation Between Carrols Restaurant and Ark Restaurants
Can any of the company-specific risk be diversified away by investing in both Carrols Restaurant 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 Carrols Restaurant and Ark Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carrols Restaurant Group and Ark Restaurants Corp, you can compare the effects of market volatilities on Carrols Restaurant 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 Carrols Restaurant with a short position of Ark Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carrols Restaurant and Ark Restaurants.
Diversification Opportunities for Carrols Restaurant and Ark Restaurants
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carrols and Ark is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Carrols Restaurant Group 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 Carrols Restaurant 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 Carrols Restaurant Group 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 Carrols Restaurant i.e., Carrols Restaurant and Ark Restaurants go up and down completely randomly.
Pair Corralation between Carrols Restaurant and Ark Restaurants
If you would invest 546.00 in Carrols Restaurant Group on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Carrols Restaurant Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Carrols Restaurant Group vs. Ark Restaurants Corp
Performance |
| Timeline |
| Carrols Restaurant |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ark Restaurants Corp |
Carrols Restaurant and Ark Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carrols Restaurant and Ark Restaurants
The main advantage of trading using opposite Carrols Restaurant and Ark Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carrols Restaurant 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.| Carrols Restaurant vs. FAT Brands | Carrols Restaurant vs. Potbelly Co | Carrols Restaurant vs. BJs Restaurants | Carrols Restaurant vs. One Group Hospitality |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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