Correlation Between Ark Restaurants and Uranium Energy

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

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

Diversification Opportunities for Ark Restaurants and Uranium Energy

-0.1

Correlation Coefficient

Ark Restaurants  Uranium Energy

Good diversification

The 3 months correlation between Ark and Uranium is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Uranium Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uranium Energy Corp and Ark Restaurants 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 Ark Restaurants Corp are associated (or correlated) with Uranium Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uranium Energy Corp has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Uranium Energy go up and down completely randomly.

Pair Corralation between Ark Restaurants and Uranium Energy

Given the investment horizon of 90 days Ark Restaurants is expected to generate 2.48 times less return on investment than Uranium Energy. In addition to that, Ark Restaurants is 1.18 times more volatile than Uranium Energy Corp. It trades about 0.07 of its total potential returns per unit of risk. Uranium Energy Corp is currently generating about 0.19 per unit of volatility. If you would invest  511.00  in Uranium Energy Corp on September 16, 2024 and sell it today you would earn a total of  277.00  from holding Uranium Energy Corp or generate 54.21% return on investment over 90 days.

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

Ark Restaurants Corp  vs.  Uranium Energy Corp

Ark Restaurants Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ark Restaurants Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward-looking signals, Ark Restaurants reported solid returns over the last few months and may actually be approaching a breakup point.

Uranium Energy Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Uranium Energy Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Uranium Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ark Restaurants and Uranium Energy

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

The idea behind Ark Restaurants Corp and Uranium Energy 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.