Correlation Between Arhaus and RumbleON

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

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

Diversification Opportunities for Arhaus and RumbleON

-0.55

Correlation Coefficient

Arhaus  RumbleON

Excellent diversification

The 3 months correlation between Arhaus and RumbleON is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Arhaus Inc and RumbleON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RumbleON 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 RumbleON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RumbleON has no effect on the direction of Arhaus i.e., Arhaus and RumbleON go up and down completely randomly.

Pair Corralation between Arhaus and RumbleON

Given the investment horizon of 90 days Arhaus Inc is expected to under-perform the RumbleON. But the stock apears to be less risky and, when comparing its historical volatility, Arhaus Inc is 1.58 times less risky than RumbleON. The stock trades about -0.06 of its potential returns per unit of risk. The RumbleON is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  422.00  in RumbleON on September 2, 2024 and sell it today you would earn a total of  261.00  from holding RumbleON or generate 61.85% return on investment over 90 days.

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

Arhaus Inc  vs.  RumbleON

Arhaus Inc

Risk-Adjusted Performance

0 of 100

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 conflicting performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

RumbleON

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RumbleON are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent fundamental drivers, RumbleON disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arhaus and RumbleON

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

The idea behind Arhaus Inc and RumbleON 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.