Correlation Between Ark Restaurants and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Methode Electronics 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 Methode Electronics 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 Methode Electronics, you can compare the effects of market volatilities on Ark Restaurants and Methode Electronics 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 Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Methode Electronics.
Diversification Opportunities for Ark Restaurants and Methode Electronics
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ark and Methode is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics 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 Methode Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Methode Electronics has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Methode Electronics go up and down completely randomly.
Pair Corralation between Ark Restaurants and Methode Electronics
Given the investment horizon of 90 days Ark Restaurants is expected to generate 2.5 times less return on investment than Methode Electronics. But when comparing it to its historical volatility, Ark Restaurants Corp is 1.47 times less risky than Methode Electronics. It trades about 0.03 of its potential returns per unit of risk. Methode Electronics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 760.00 in Methode Electronics on September 3, 2025 and sell it today you would earn a total of 70.00 from holding Methode Electronics or generate 9.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.5% |
| Values | Daily Returns |
Ark Restaurants Corp vs. Methode Electronics
Performance |
| Timeline |
| Ark Restaurants Corp |
| Methode Electronics |
Ark Restaurants and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ark Restaurants and Methode Electronics
The main advantage of trading using opposite Ark Restaurants and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Methode Electronics 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 Methode Electronics will offset losses from the drop in Methode Electronics' long position.| Ark Restaurants vs. Bon Ton Stores | Ark Restaurants vs. BJs Wholesale Club | Ark Restaurants vs. QKL Stores | Ark Restaurants vs. Retail Food Group |
| Methode Electronics vs. GOME Retail Holdings | Methode Electronics vs. Earthworks Entertainment | Methode Electronics vs. Dolphin Entertainment | Methode Electronics vs. JD Sports Fashion |
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 Stocks Directory module to find actively traded stocks across global markets.
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