Correlation Between ANI Pharmaceuticals and Ark Restaurants

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

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

Diversification Opportunities for ANI Pharmaceuticals and Ark Restaurants

-0.71

Correlation Coefficient

ANI Pharmaceuticals  Ark Restaurants

Pay attention - limited upside

The 3 months correlation between ANI and Ark is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ANI Pharmaceuticals and Ark Restaurants Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ark Restaurants Corp and ANI Pharmaceuticals 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 ANI Pharmaceuticals are associated (or correlated) with Ark Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ark Restaurants Corp has no effect on the direction of ANI Pharmaceuticals i.e., ANI Pharmaceuticals and Ark Restaurants go up and down completely randomly.

Pair Corralation between ANI Pharmaceuticals and Ark Restaurants

Given the investment horizon of 90 days ANI Pharmaceuticals is expected to under-perform the Ark Restaurants. But the stock apears to be less risky and, when comparing its historical volatility, ANI Pharmaceuticals is 1.36 times less risky than Ark Restaurants. The stock trades about -0.18 of its potential returns per unit of risk. The Ark Restaurants Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,360  in Ark Restaurants Corp on January 29, 2024 and sell it today you would earn a total of  3.00  from holding Ark Restaurants Corp or generate 0.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	85.71%
Values	Daily Returns

ANI Pharmaceuticals  vs.  Ark Restaurants Corp

ANI Pharmaceuticals

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANI Pharmaceuticals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, ANI Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Ark Restaurants Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ark Restaurants Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with ANI Pharmaceuticals and Ark Restaurants

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

The idea behind ANI Pharmaceuticals and Ark Restaurants 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.