Correlation Between Ark Restaurants and LuxUrban Hotels
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and LuxUrban Hotels 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 Ark Restaurants and LuxUrban Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ark Restaurants Corp and LuxUrban Hotels 1300, you can compare the effects of market volatilities on Ark Restaurants and LuxUrban Hotels 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 Ark Restaurants with a short position of LuxUrban Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and LuxUrban Hotels.
Diversification Opportunities for Ark Restaurants and LuxUrban Hotels
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ark and LuxUrban is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and LuxUrban Hotels 1300 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LuxUrban Hotels 1300 and Ark Restaurants 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 Ark Restaurants Corp are associated (or correlated) with LuxUrban Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LuxUrban Hotels 1300 has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and LuxUrban Hotels go up and down completely randomly.
Pair Corralation between Ark Restaurants and LuxUrban Hotels
Given the investment horizon of 90 days Ark Restaurants Corp is expected to generate 0.62 times more return on investment than LuxUrban Hotels. However, Ark Restaurants Corp is 1.62 times less risky than LuxUrban Hotels. It trades about 0.12 of its potential returns per unit of risk. LuxUrban Hotels 1300 is currently generating about -0.02 per unit of risk. If you would invest 1,375 in Ark Restaurants Corp on February 27, 2024 and sell it today you would earn a total of 184.00 from holding Ark Restaurants Corp or generate 13.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 90.48% |
Values | Daily Returns |
Ark Restaurants Corp vs. LuxUrban Hotels 1300
Performance |
Timeline |
Ark Restaurants Corp |
LuxUrban Hotels 1300 |
Ark Restaurants and LuxUrban Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ark Restaurants and LuxUrban Hotels
The main advantage of trading using opposite Ark Restaurants and LuxUrban Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, LuxUrban Hotels 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 LuxUrban Hotels will offset losses from the drop in LuxUrban Hotels' long position.Ark Restaurants vs. Merck Company | Ark Restaurants vs. Deciphera Pharmaceuticals LLC | Ark Restaurants vs. Innovator SP 500 | Ark Restaurants vs. Americold Realty Trust |
LuxUrban Hotels vs. GreenTree Hospitality Group | LuxUrban Hotels vs. The Intergroup | LuxUrban Hotels vs. LuxUrban Hotels | LuxUrban Hotels vs. Sonder Holdings |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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