Correlation Between Ecofin Global and Mitchells Butlers
Can any of the company-specific risk be diversified away by investing in both Ecofin Global 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 Ecofin Global and Mitchells Butlers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofin Global Utilities and Mitchells Butlers PLC, you can compare the effects of market volatilities on Ecofin Global 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 Ecofin Global with a short position of Mitchells Butlers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofin Global and Mitchells Butlers.
Diversification Opportunities for Ecofin Global and Mitchells Butlers
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ecofin and Mitchells is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ecofin Global Utilities 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 Ecofin Global 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 Ecofin Global Utilities 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 Ecofin Global i.e., Ecofin Global and Mitchells Butlers go up and down completely randomly.
Pair Corralation between Ecofin Global and Mitchells Butlers
Assuming the 90 days trading horizon Ecofin Global is expected to generate 2.88 times less return on investment than Mitchells Butlers. But when comparing it to its historical volatility, Ecofin Global Utilities is 1.06 times less risky than Mitchells Butlers. It trades about 0.07 of its potential returns per unit of risk. Mitchells Butlers PLC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 23,100 in Mitchells Butlers PLC on September 13, 2024 and sell it today you would earn a total of 1,150 from holding Mitchells Butlers PLC or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecofin Global Utilities vs. Mitchells Butlers PLC
Performance |
| Timeline |
| Ecofin Global Utilities |
| Mitchells Butlers PLC |
Ecofin Global and Mitchells Butlers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofin Global and Mitchells Butlers
The main advantage of trading using opposite Ecofin Global and Mitchells Butlers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofin Global 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.| Ecofin Global vs. Catalyst Media Group | Ecofin Global vs. CATLIN GROUP | Ecofin Global vs. Tamburi Investment Partners | Ecofin Global vs. Magnora ASA |
| Mitchells Butlers vs. Ecclesiastical Insurance Office | Mitchells Butlers vs. Bisichi Mining PLC | Mitchells Butlers vs. GreenX Metals | Mitchells Butlers vs. Universal Display Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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