Correlation Between Mitchells Butlers and Tanger Factory
Can any of the company-specific risk be diversified away by investing in both Mitchells Butlers and Tanger Factory 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 Tanger Factory 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 Tanger Factory Outlet, you can compare the effects of market volatilities on Mitchells Butlers and Tanger Factory 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 Tanger Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitchells Butlers and Tanger Factory.
Diversification Opportunities for Mitchells Butlers and Tanger Factory
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mitchells and Tanger is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mitchells Butlers PLC and Tanger Factory Outlet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanger Factory Outlet 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 Tanger Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanger Factory Outlet has no effect on the direction of Mitchells Butlers i.e., Mitchells Butlers and Tanger Factory go up and down completely randomly.
Pair Corralation between Mitchells Butlers and Tanger Factory
Assuming the 90 days trading horizon Mitchells Butlers PLC is expected to under-perform the Tanger Factory. In addition to that, Mitchells Butlers is 1.59 times more volatile than Tanger Factory Outlet. It trades about -0.09 of its total potential returns per unit of risk. Tanger Factory Outlet is currently generating about 0.31 per unit of volatility. If you would invest 3,358 in Tanger Factory Outlet on August 30, 2024 and sell it today you would earn a total of 316.00 from holding Tanger Factory Outlet or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitchells Butlers PLC vs. Tanger Factory Outlet
Performance |
| Timeline |
| Mitchells Butlers PLC |
| Tanger Factory Outlet |
Mitchells Butlers and Tanger Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitchells Butlers and Tanger Factory
The main advantage of trading using opposite Mitchells Butlers and Tanger Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitchells Butlers position performs unexpectedly, Tanger Factory 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 Tanger Factory will offset losses from the drop in Tanger Factory's long position.| Mitchells Butlers vs. Foresight Environmental Infrastructure | Mitchells Butlers vs. Ironveld Plc | Mitchells Butlers vs. Science in Sport | Mitchells Butlers vs. MoneysupermarketCom Group PLC |
| Tanger Factory vs. Gaztransport et Technigaz | Tanger Factory vs. MTI Wireless Edge | Tanger Factory vs. Premier Foods PLC | Tanger Factory vs. Science in Sport |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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