Correlation Between Amergent Hospitality and Ark Restaurants

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

By analyzing existing cross correlation between Amergent Hospitality Group and Ark Restaurants Corp, you can compare the effects of market volatilities on Amergent Hospitality 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 Amergent Hospitality with a short position of Ark Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amergent Hospitality and Ark Restaurants.

Diversification Opportunities for Amergent Hospitality and Ark Restaurants

0.0

Correlation Coefficient

Amergent Hospitality  Ark Restaurants

Pay attention - limited upside

The 3 months correlation between Amergent and Ark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amergent Hospitality 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 Amergent Hospitality 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 Amergent Hospitality 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 Amergent Hospitality i.e., Amergent Hospitality and Ark Restaurants go up and down completely randomly.

Pair Corralation between Amergent Hospitality and Ark Restaurants

If you would invest  0.01  in Amergent Hospitality Group on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Amergent Hospitality Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	31.25%
Values	Daily Returns

Amergent Hospitality Group  vs.  Ark Restaurants Corp

Amergent Hospitality

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amergent Hospitality Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Amergent Hospitality is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Ark Restaurants Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ark Restaurants Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Amergent Hospitality and Ark Restaurants

The main advantage of trading using opposite Amergent Hospitality and Ark Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amergent Hospitality 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 Amergent Hospitality Group 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.