Correlation Between Arcontech Group and Mitchells Butlers
Can any of the company-specific risk be diversified away by investing in both Arcontech Group and Mitchells Butlers 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 Arcontech Group and Mitchells Butlers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcontech Group Plc and Mitchells Butlers PLC, you can compare the effects of market volatilities on Arcontech Group and Mitchells Butlers 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 Arcontech Group with a short position of Mitchells Butlers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcontech Group and Mitchells Butlers.
Diversification Opportunities for Arcontech Group and Mitchells Butlers
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arcontech and Mitchells is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Arcontech Group Plc and Mitchells Butlers PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitchells Butlers PLC and Arcontech Group 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 Arcontech Group Plc are associated (or correlated) with Mitchells Butlers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitchells Butlers PLC has no effect on the direction of Arcontech Group i.e., Arcontech Group and Mitchells Butlers go up and down completely randomly.
Pair Corralation between Arcontech Group and Mitchells Butlers
Assuming the 90 days trading horizon Arcontech Group Plc is expected to under-perform the Mitchells Butlers. But the stock apears to be less risky and, when comparing its historical volatility, Arcontech Group Plc is 1.63 times less risky than Mitchells Butlers. The stock trades about -0.33 of its potential returns per unit of risk. The Mitchells Butlers PLC is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 24,500 in Mitchells Butlers PLC on November 2, 2024 and sell it today you would lose (1,550) from holding Mitchells Butlers PLC or give up 6.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcontech Group Plc vs. Mitchells Butlers PLC
Performance |
| Timeline |
| Arcontech Group Plc |
| Mitchells Butlers PLC |
Arcontech Group and Mitchells Butlers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcontech Group and Mitchells Butlers
The main advantage of trading using opposite Arcontech Group and Mitchells Butlers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcontech Group position performs unexpectedly, Mitchells Butlers 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 Mitchells Butlers will offset losses from the drop in Mitchells Butlers' long position.| Arcontech Group vs. China Pacific Insurance | Arcontech Group vs. Cairo Communication SpA | Arcontech Group vs. Spirent Communications plc | Arcontech Group vs. Verizon Communications |
| Mitchells Butlers vs. Melia Hotels | Mitchells Butlers vs. PPHE Hotel Group | Mitchells Butlers vs. Compagnie Plastic Omnium | Mitchells Butlers vs. Scandic Hotels Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |