Correlation Between Ark Restaurants and Amergent Hospitality

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

Diversification Opportunities for Ark Restaurants and Amergent Hospitality

0.0

Correlation Coefficient

Ark Restaurants  Amergent Hospitality

Pay attention - limited upside

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

Pair Corralation between Ark Restaurants and Amergent Hospitality

If you would invest  999.00  in Ark Restaurants Corp on December 2, 2024 and sell it today you would earn a total of  86.00  from holding Ark Restaurants Corp or generate 8.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ark Restaurants Corp  vs.  Amergent Hospitality Group

Ark Restaurants Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ark Restaurants Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward-looking signals, Ark Restaurants reported solid returns over the last few months and may actually be approaching a breakup point.

Amergent Hospitality

Risk-Adjusted Performance

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.

Pair Trading with Ark Restaurants and Amergent Hospitality

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

The idea behind Ark Restaurants Corp and Amergent Hospitality 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.