Correlation Between Whole Earth and Arko Corp

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

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

Diversification Opportunities for Whole Earth and Arko Corp

-0.11

Correlation Coefficient

Whole Earth  Arko Corp

Good diversification

The 3 months correlation between Whole and Arko is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Whole Earth Brands and Arko Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arko Corp and Whole Earth 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 Whole Earth Brands are associated (or correlated) with Arko Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arko Corp has no effect on the direction of Whole Earth i.e., Whole Earth and Arko Corp go up and down completely randomly.

Pair Corralation between Whole Earth and Arko Corp

If you would invest  662.00  in Arko Corp on September 17, 2024 and sell it today you would earn a total of  70.00  from holding Arko Corp or generate 10.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Whole Earth Brands  vs.  Arko Corp

Whole Earth Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Whole Earth Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Whole Earth is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Arko Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Arko Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward-looking signals, Arko Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Whole Earth and Arko Corp

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

The idea behind Whole Earth Brands and Arko 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 Commodity Directory module to find actively traded commodities issued by global exchanges.