Correlation Between ARK Genomic and Revlon

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

By analyzing existing cross correlation between ARK Genomic Revolution and Revlon Inc, you can compare the effects of market volatilities on ARK Genomic and Revlon 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 Genomic with a short position of Revlon. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARK Genomic and Revlon.

Diversification Opportunities for ARK Genomic and Revlon

0.35

Correlation Coefficient

ARK Genomic  Revlon

Weak diversification

The 3 months correlation between ARK and Revlon is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ARK Genomic Revolution and Revlon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revlon Inc and ARK Genomic 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 Genomic Revolution are associated (or correlated) with Revlon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revlon Inc has no effect on the direction of ARK Genomic i.e., ARK Genomic and Revlon go up and down completely randomly.

Pair Corralation between ARK Genomic and Revlon

If you would invest  39.00  in Revlon Inc on January 24, 2024 and sell it today you would earn a total of  0.00  from holding Revlon Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

ARK Genomic Revolution  vs.  Revlon Inc

ARK Genomic Revolution

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARK Genomic Revolution has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's forward-looking signals remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

Revlon Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ARK Genomic and Revlon

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

The idea behind ARK Genomic Revolution and Revlon Inc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.