Correlation Between NH Foods and Ark Restaurants

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

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

Diversification Opportunities for NH Foods and Ark Restaurants

0.0

Correlation Coefficient

NH Foods  Ark Restaurants

Pay attention - limited upside

The 3 months correlation between NIPMY and Ark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods Ltd 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 NH Foods 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 NH Foods Ltd 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 NH Foods i.e., NH Foods and Ark Restaurants go up and down completely randomly.

Pair Corralation between NH Foods and Ark Restaurants

If you would invest  1,025  in Ark Restaurants Corp on September 18, 2024 and sell it today you would earn a total of  154.00  from holding Ark Restaurants Corp or generate 15.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

NH Foods Ltd  vs.  Ark Restaurants Corp

NH Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NH Foods Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, NH Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ark Restaurants Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ark Restaurants Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward-looking signals, Ark Restaurants may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with NH Foods and Ark Restaurants

The main advantage of trading using opposite NH Foods and Ark Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods 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 NH Foods Ltd 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.