Correlation Between Jackpot Digital and Arhaus

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

By analyzing existing cross correlation between Jackpot Digital and Arhaus Inc, you can compare the effects of market volatilities on Jackpot Digital and Arhaus 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 Jackpot Digital with a short position of Arhaus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackpot Digital and Arhaus.

Diversification Opportunities for Jackpot Digital and Arhaus

0.47

Correlation Coefficient

Jackpot Digital  Arhaus

Very weak diversification

The 3 months correlation between Jackpot and Arhaus is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jackpot Digital and Arhaus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arhaus Inc and Jackpot Digital 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 Jackpot Digital are associated (or correlated) with Arhaus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arhaus Inc has no effect on the direction of Jackpot Digital i.e., Jackpot Digital and Arhaus go up and down completely randomly.

Pair Corralation between Jackpot Digital and Arhaus

Assuming the 90 days horizon Jackpot Digital is expected to under-perform the Arhaus. In addition to that, Jackpot Digital is 1.25 times more volatile than Arhaus Inc. It trades about -0.1 of its total potential returns per unit of risk. Arhaus Inc is currently generating about 0.0 per unit of volatility. If you would invest  1,125  in Arhaus Inc on September 4, 2024 and sell it today you would lose (50.00) from holding Arhaus Inc or give up 4.44% of portfolio value over 90 days.

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

Jackpot Digital  vs.  Arhaus Inc

Jackpot Digital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jackpot Digital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Arhaus Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arhaus Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Arhaus is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Jackpot Digital and Arhaus

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

The idea behind Jackpot Digital and Arhaus Inc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..