Correlation Between Ark Restaurants and Flanigans Enterprises

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

Diversification Opportunities for Ark Restaurants and Flanigans Enterprises

0.11

Correlation Coefficient

Ark Restaurants  Flanigans Enterprises

Average diversification

The 3 months correlation between Ark and Flanigans is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Flanigans Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flanigans Enterprises 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 Flanigans Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flanigans Enterprises has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Flanigans Enterprises go up and down completely randomly.

Pair Corralation between Ark Restaurants and Flanigans Enterprises

Given the investment horizon of 90 days Ark Restaurants Corp is expected to under-perform the Flanigans Enterprises. In addition to that, Ark Restaurants is 2.87 times more volatile than Flanigans Enterprises. It trades about -0.02 of its total potential returns per unit of risk. Flanigans Enterprises is currently generating about 0.02 per unit of volatility. If you would invest  2,512  in Flanigans Enterprises on December 27, 2024 and sell it today you would earn a total of  38.00  from holding Flanigans Enterprises or generate 1.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.44%
Values	Daily Returns

Ark Restaurants Corp  vs.  Flanigans Enterprises

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.

Flanigans Enterprises

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Flanigans Enterprises are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Flanigans Enterprises 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 Flanigans Enterprises

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

The idea behind Ark Restaurants Corp and Flanigans Enterprises 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.