Correlation Between Dalata Hotel and Ark Restaurants

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

By analyzing existing cross correlation between Dalata Hotel Group and Ark Restaurants Corp, you can compare the effects of market volatilities on Dalata Hotel and Ark Restaurants 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 Dalata Hotel with a short position of Ark Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and Ark Restaurants.

Diversification Opportunities for Dalata Hotel and Ark Restaurants

0.0

Correlation Coefficient

Dalata Hotel  Ark Restaurants

Pay attention - limited upside

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

Pair Corralation between Dalata Hotel and Ark Restaurants

Assuming the 90 days horizon Dalata Hotel Group is expected to generate 0.09 times more return on investment than Ark Restaurants. However, Dalata Hotel Group is 10.71 times less risky than Ark Restaurants. It trades about -0.03 of its potential returns per unit of risk. Ark Restaurants Corp is currently generating about -0.01 per unit of risk. If you would invest  499.00  in Dalata Hotel Group on September 24, 2024 and sell it today you would lose (11.00) from holding Dalata Hotel Group or give up 2.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.58%
Values	Daily Returns

Dalata Hotel Group  vs.  Ark Restaurants Corp

Dalata Hotel Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dalata Hotel Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dalata Hotel is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Ark Restaurants Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ark Restaurants Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Dalata Hotel and Ark Restaurants

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

The idea behind Dalata Hotel Group and Ark Restaurants Corp 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.