Correlation Between Mitchells Butlers and Atari SAS
Can any of the company-specific risk be diversified away by investing in both Mitchells Butlers and Atari SAS 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 Mitchells Butlers and Atari SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitchells Butlers PLC and Atari SAS, you can compare the effects of market volatilities on Mitchells Butlers and Atari SAS 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 Mitchells Butlers with a short position of Atari SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitchells Butlers and Atari SAS.
Diversification Opportunities for Mitchells Butlers and Atari SAS
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitchells and Atari is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mitchells Butlers PLC and Atari SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atari SAS and Mitchells Butlers 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 Mitchells Butlers PLC are associated (or correlated) with Atari SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atari SAS has no effect on the direction of Mitchells Butlers i.e., Mitchells Butlers and Atari SAS go up and down completely randomly.
Pair Corralation between Mitchells Butlers and Atari SAS
Assuming the 90 days trading horizon Mitchells Butlers PLC is expected to generate 0.37 times more return on investment than Atari SAS. However, Mitchells Butlers PLC is 2.7 times less risky than Atari SAS. It trades about -0.09 of its potential returns per unit of risk. Atari SAS is currently generating about -0.12 per unit of risk. If you would invest 23,400 in Mitchells Butlers PLC on November 29, 2024 and sell it today you would lose (750.00) from holding Mitchells Butlers PLC or give up 3.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitchells Butlers PLC vs. Atari SAS
Performance |
| Timeline |
| Mitchells Butlers PLC |
| Atari SAS |
Mitchells Butlers and Atari SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitchells Butlers and Atari SAS
The main advantage of trading using opposite Mitchells Butlers and Atari SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitchells Butlers position performs unexpectedly, Atari SAS 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 Atari SAS will offset losses from the drop in Atari SAS's long position.| Mitchells Butlers vs. Naturhouse Health SA | Mitchells Butlers vs. Ross Stores | Mitchells Butlers vs. Planet Fitness Cl | Mitchells Butlers vs. Dairy Farm International |
| Atari SAS vs. Home Depot | Atari SAS vs. Weiss Korea Opportunity | Atari SAS vs. River and Mercantile | Atari SAS vs. Chrysalis Investments |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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