Correlation Between Playstudios and Ark Restaurants

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

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

Diversification Opportunities for Playstudios and Ark Restaurants

0.27

Correlation Coefficient

Playstudios  Ark Restaurants

Modest diversification

The 3 months correlation between Playstudios and Ark is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Playstudios 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 Playstudios 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 Playstudios 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 Playstudios i.e., Playstudios and Ark Restaurants go up and down completely randomly.

Pair Corralation between Playstudios and Ark Restaurants

Given the investment horizon of 90 days Playstudios is expected to under-perform the Ark Restaurants. But the stock apears to be less risky and, when comparing its historical volatility, Playstudios is 1.55 times less risky than Ark Restaurants. The stock trades about -0.16 of its potential returns per unit of risk. The Ark Restaurants Corp is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  1,485  in Ark Restaurants Corp on December 7, 2024 and sell it today you would lose (419.00) from holding Ark Restaurants Corp or give up 28.22% of portfolio value over 90 days.

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

Playstudios  vs.  Ark Restaurants Corp

Playstudios

Risk-Adjusted Performance

Very Weak

Over the last 90 days Playstudios has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 inconsistent performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Playstudios and Ark Restaurants

The main advantage of trading using opposite Playstudios and Ark Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playstudios 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 Playstudios 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.