Correlation Between Ark Restaurants and Adkins Energy

Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Adkins Energy 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 Adkins Energy 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 Adkins Energy LLC, you can compare the effects of market volatilities on Ark Restaurants and Adkins Energy 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 Adkins Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Adkins Energy.

Diversification Opportunities for Ark Restaurants and Adkins Energy

0.0

Correlation Coefficient

Ark Restaurants  Adkins Energy

Pay attention - limited upside

The 3 months correlation between Ark and Adkins is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Adkins Energy LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adkins Energy LLC 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 Adkins Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adkins Energy LLC has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Adkins Energy go up and down completely randomly.

Pair Corralation between Ark Restaurants and Adkins Energy

If you would invest  43,000  in Adkins Energy LLC on December 20, 2024 and sell it today you would earn a total of  0.00  from holding Adkins Energy LLC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Ark Restaurants Corp  vs.  Adkins Energy LLC

Ark Restaurants Corp

Risk-Adjusted Performance

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 relatively invariable forward-looking signals, Ark Restaurants is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Adkins Energy LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adkins Energy LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Adkins Energy is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ark Restaurants and Adkins Energy

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

The idea behind Ark Restaurants Corp and Adkins Energy LLC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.