Correlation Between Marstons PLC and Fortune Brands
Can any of the company-specific risk be diversified away by investing in both Marstons PLC and Fortune Brands 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 Marstons PLC and Fortune Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marstons PLC and Fortune Brands Home, you can compare the effects of market volatilities on Marstons PLC and Fortune Brands 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 Marstons PLC with a short position of Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marstons PLC and Fortune Brands.
Diversification Opportunities for Marstons PLC and Fortune Brands
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marstons and Fortune is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Marstons PLC and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home and Marstons PLC 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 Marstons PLC are associated (or correlated) with Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of Marstons PLC i.e., Marstons PLC and Fortune Brands go up and down completely randomly.
Pair Corralation between Marstons PLC and Fortune Brands
Assuming the 90 days trading horizon Marstons PLC is expected to generate 7.0 times less return on investment than Fortune Brands. In addition to that, Marstons PLC is 1.13 times more volatile than Fortune Brands Home. It trades about 0.0 of its total potential returns per unit of risk. Fortune Brands Home is currently generating about 0.03 per unit of volatility. If you would invest 6,231 in Fortune Brands Home on October 28, 2024 and sell it today you would earn a total of 1,050 from holding Fortune Brands Home or generate 16.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.96% |
| Values | Daily Returns |
Marstons PLC vs. Fortune Brands Home
Performance |
| Timeline |
| Marstons PLC |
| Fortune Brands Home |
Marstons PLC and Fortune Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marstons PLC and Fortune Brands
The main advantage of trading using opposite Marstons PLC and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marstons PLC position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.| Marstons PLC vs. Golden Metal Resources | Marstons PLC vs. Spirent Communications plc | Marstons PLC vs. Zegona Communications Plc | Marstons PLC vs. Verizon Communications |
| Fortune Brands vs. Elmos Semiconductor SE | Fortune Brands vs. Hollywood Bowl Group | Fortune Brands vs. British American Tobacco | Fortune Brands vs. Ubisoft Entertainment |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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