Correlation Between Ark Restaurants and Celsius Holdings

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

Diversification Opportunities for Ark Restaurants and Celsius Holdings

0.31

Correlation Coefficient

Ark Restaurants  Celsius Holdings

Weak diversification

The 3 months correlation between Ark and Celsius is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings 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 Celsius Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Holdings has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Celsius Holdings go up and down completely randomly.

Pair Corralation between Ark Restaurants and Celsius Holdings

Given the investment horizon of 90 days Ark Restaurants Corp is expected to generate 1.94 times more return on investment than Celsius Holdings. However, Ark Restaurants is 1.94 times more volatile than Celsius Holdings. It trades about 0.03 of its potential returns per unit of risk. Celsius Holdings is currently generating about -0.06 per unit of risk. If you would invest  1,485  in Ark Restaurants Corp on October 8, 2024 and sell it today you would lose (12.00) from holding Ark Restaurants Corp or give up 0.81% of portfolio value over 90 days.

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

Ark Restaurants Corp  vs.  Celsius Holdings

Ark Restaurants Corp

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ark Restaurants Corp are ranked lower than 7 (%) 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.

Celsius Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong essential indicators, Celsius Holdings is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ark Restaurants and Celsius Holdings

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

The idea behind Ark Restaurants Corp and Celsius Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.