Correlation Between Biglari Holdings and Marstons PLC
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings 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 Biglari Holdings and Marstons PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Marstons PLC, you can compare the effects of market volatilities on Biglari Holdings 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 Biglari Holdings with a short position of Marstons PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Marstons PLC.
Diversification Opportunities for Biglari Holdings and Marstons PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Biglari and Marstons is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Marstons PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marstons PLC and Biglari Holdings 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 Biglari Holdings 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 Biglari Holdings i.e., Biglari Holdings and Marstons PLC go up and down completely randomly.
Pair Corralation between Biglari Holdings and Marstons PLC
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.5 times more return on investment than Marstons PLC. However, Biglari Holdings is 2.01 times less risky than Marstons PLC. It trades about 0.05 of its potential returns per unit of risk. Marstons PLC is currently generating about 0.01 per unit of risk. If you would invest 14,333 in Biglari Holdings on August 28, 2024 and sell it today you would earn a total of 6,365 from holding Biglari Holdings or generate 44.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Biglari Holdings vs. Marstons PLC
Performance |
| Timeline |
| Biglari Holdings |
| Marstons PLC |
Biglari Holdings and Marstons PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Marstons PLC
The main advantage of trading using opposite Biglari Holdings and Marstons PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings 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.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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