Correlation Between Aftermaster and Arhaus

Can any of the company-specific risk be diversified away by investing in both Aftermaster and Arhaus 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 Aftermaster and Arhaus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aftermaster and Arhaus Inc, you can compare the effects of market volatilities on Aftermaster and Arhaus 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 Aftermaster with a short position of Arhaus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aftermaster and Arhaus.

Diversification Opportunities for Aftermaster and Arhaus

-0.32

Correlation Coefficient

Aftermaster  Arhaus

Very good diversification

The 3 months correlation between Aftermaster and Arhaus is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aftermaster and Arhaus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arhaus Inc and Aftermaster 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 Aftermaster are associated (or correlated) with Arhaus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arhaus Inc has no effect on the direction of Aftermaster i.e., Aftermaster and Arhaus go up and down completely randomly.

Pair Corralation between Aftermaster and Arhaus

Given the investment horizon of 90 days Aftermaster is expected to under-perform the Arhaus. In addition to that, Aftermaster is 2.91 times more volatile than Arhaus Inc. It trades about -0.13 of its total potential returns per unit of risk. Arhaus Inc is currently generating about -0.01 per unit of volatility. If you would invest  928.00  in Arhaus Inc on December 30, 2024 and sell it today you would lose (71.00) from holding Arhaus Inc or give up 7.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aftermaster  vs.  Arhaus Inc

Aftermaster

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aftermaster has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Arhaus Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arhaus Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Arhaus is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aftermaster and Arhaus

The main advantage of trading using opposite Aftermaster and Arhaus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aftermaster position performs unexpectedly, Arhaus 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 Arhaus will offset losses from the drop in Arhaus' long position.

The idea behind Aftermaster and Arhaus Inc 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.