Correlation Between Fiesta Restaurant and Marstons PLC
Can any of the company-specific risk be diversified away by investing in both Fiesta Restaurant 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 Fiesta Restaurant and Marstons PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiesta Restaurant Group and Marstons PLC, you can compare the effects of market volatilities on Fiesta Restaurant 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 Fiesta Restaurant with a short position of Marstons PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiesta Restaurant and Marstons PLC.
Diversification Opportunities for Fiesta Restaurant and Marstons PLC
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fiesta and Marstons is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Fiesta Restaurant Group and Marstons PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marstons PLC and Fiesta Restaurant 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 Fiesta Restaurant Group 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 Fiesta Restaurant i.e., Fiesta Restaurant and Marstons PLC go up and down completely randomly.
Pair Corralation between Fiesta Restaurant and Marstons PLC
If you would invest 41.00 in Marstons PLC on August 24, 2024 and sell it today you would earn a total of 15.00 from holding Marstons PLC or generate 36.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Fiesta Restaurant Group vs. Marstons PLC
Performance |
| Timeline |
| Fiesta Restaurant |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Marstons PLC |
Fiesta Restaurant and Marstons PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiesta Restaurant and Marstons PLC
The main advantage of trading using opposite Fiesta Restaurant and Marstons PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiesta Restaurant 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.| Fiesta Restaurant vs. BJs Restaurants | Fiesta Restaurant vs. Dine Brands Global | Fiesta Restaurant vs. Brinker International | Fiesta Restaurant vs. FAT Brands |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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