Correlation Between Compass Group and Marstons PLC
Can any of the company-specific risk be diversified away by investing in both Compass Group 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 Compass Group and Marstons PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Group PLC and Marstons PLC, you can compare the effects of market volatilities on Compass Group 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 Compass Group with a short position of Marstons PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Group and Marstons PLC.
Diversification Opportunities for Compass Group and Marstons PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compass and Marstons is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compass Group PLC and Marstons PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marstons PLC and Compass 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 Compass Group PLC 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 Compass Group i.e., Compass Group and Marstons PLC go up and down completely randomly.
Pair Corralation between Compass Group and Marstons PLC
If you would invest 3,209 in Compass Group PLC on August 31, 2024 and sell it today you would earn a total of 263.00 from holding Compass Group PLC or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Group PLC vs. Marstons PLC
Performance |
| Timeline |
| Compass Group PLC |
| Marstons PLC |
Compass Group and Marstons PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Group and Marstons PLC
The main advantage of trading using opposite Compass Group and Marstons PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Group 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.| Compass Group vs. Bunzl plc | Compass Group vs. Associated British Foods | Compass Group vs. Coloplast A | Compass Group vs. Experian plc PK |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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