Correlation Between Flanigans Enterprises and Marstons PLC
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Marstons PLC 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 Flanigans Enterprises and Marstons PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flanigans Enterprises and Marstons PLC, you can compare the effects of market volatilities on Flanigans Enterprises and Marstons PLC 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 Flanigans Enterprises with a short position of Marstons PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Marstons PLC.
Diversification Opportunities for Flanigans Enterprises and Marstons PLC
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Flanigans and Marstons is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Marstons PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marstons PLC and Flanigans Enterprises 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 Flanigans Enterprises are associated (or correlated) with Marstons PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marstons PLC has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Marstons PLC go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and Marstons PLC
Considering the 90-day investment horizon Flanigans Enterprises is expected to generate 18.8 times more return on investment than Marstons PLC. However, Flanigans Enterprises is 18.8 times more volatile than Marstons PLC. It trades about 0.04 of its potential returns per unit of risk. Marstons PLC is currently generating about 0.02 per unit of risk. If you would invest 2,494 in Flanigans Enterprises on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Flanigans Enterprises or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.59% |
| Values | Daily Returns |
Flanigans Enterprises vs. Marstons PLC
Performance |
| Timeline |
| Flanigans Enterprises |
| Marstons PLC |
Flanigans Enterprises and Marstons PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flanigans Enterprises and Marstons PLC
The main advantage of trading using opposite Flanigans Enterprises and Marstons PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Marstons PLC 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 Marstons PLC will offset losses from the drop in Marstons PLC's long position.| Flanigans Enterprises vs. FAT Brands | Flanigans Enterprises vs. Potbelly Co | Flanigans Enterprises vs. BJs Restaurants | Flanigans Enterprises vs. One Group Hospitality |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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