Correlation Between Arhaus and Azure Holding

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

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

Diversification Opportunities for Arhaus and Azure Holding

-0.39

Correlation Coefficient

Arhaus  Azure Holding

Very good diversification

The 3 months correlation between Arhaus and Azure is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Arhaus Inc and Azure Holding Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azure Holding Group and Arhaus 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 Arhaus Inc are associated (or correlated) with Azure Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azure Holding Group has no effect on the direction of Arhaus i.e., Arhaus and Azure Holding go up and down completely randomly.

Pair Corralation between Arhaus and Azure Holding

Given the investment horizon of 90 days Arhaus is expected to generate 20.0 times less return on investment than Azure Holding. But when comparing it to its historical volatility, Arhaus Inc is 3.88 times less risky than Azure Holding. It trades about 0.03 of its potential returns per unit of risk. Azure Holding Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Azure Holding Group on December 28, 2024 and sell it today you would earn a total of  7.00  from holding Azure Holding Group or generate 70.0% return on investment over 90 days.

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

Arhaus Inc  vs.  Azure Holding Group

Arhaus Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arhaus Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, Arhaus may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Azure Holding Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Holding Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Azure Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arhaus and Azure Holding

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

The idea behind Arhaus Inc and Azure Holding Group 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.