Correlation Between Arhaus and Jackpot Digital

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

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

Diversification Opportunities for Arhaus and Jackpot Digital

0.44

Correlation Coefficient

Arhaus  Jackpot Digital

Very weak diversification

The 3 months correlation between Arhaus and Jackpot is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Arhaus Inc and Jackpot Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackpot Digital 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 Jackpot Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackpot Digital has no effect on the direction of Arhaus i.e., Arhaus and Jackpot Digital go up and down completely randomly.

Pair Corralation between Arhaus and Jackpot Digital

Given the investment horizon of 90 days Arhaus Inc is expected to generate 0.62 times more return on investment than Jackpot Digital. However, Arhaus Inc is 1.62 times less risky than Jackpot Digital. It trades about 0.01 of its potential returns per unit of risk. Jackpot Digital is currently generating about 0.0 per unit of risk. If you would invest  1,101  in Arhaus Inc on September 6, 2024 and sell it today you would lose (11.00) from holding Arhaus Inc or give up 1.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Arhaus Inc  vs.  Jackpot Digital

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 nearly stable basic indicators, Jackpot Digital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Arhaus and Jackpot Digital

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

The idea behind Arhaus Inc and Jackpot Digital 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.