Correlation Between Arhaus and Blink Charging

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

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

Diversification Opportunities for Arhaus and Blink Charging

-0.36

Correlation Coefficient

Arhaus  Blink Charging

Very good diversification

The 3 months correlation between Arhaus and Blink is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Arhaus Inc and Blink Charging Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blink Charging and Arhaus 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 Arhaus Inc are associated (or correlated) with Blink Charging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blink Charging has no effect on the direction of Arhaus i.e., Arhaus and Blink Charging go up and down completely randomly.

Pair Corralation between Arhaus and Blink Charging

Given the investment horizon of 90 days Arhaus Inc is expected to under-perform the Blink Charging. But the stock apears to be less risky and, when comparing its historical volatility, Arhaus Inc is 1.44 times less risky than Blink Charging. The stock trades about -0.05 of its potential returns per unit of risk. The Blink Charging Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  171.00  in Blink Charging Co on August 31, 2024 and sell it today you would lose (15.00) from holding Blink Charging Co or give up 8.77% of portfolio value over 90 days.

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

Arhaus Inc  vs.  Blink Charging Co

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 latest sluggish performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Blink Charging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blink Charging Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Blink Charging is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Arhaus and Blink Charging

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

The idea behind Arhaus Inc and Blink Charging Co 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.