Correlation Between Marstons PLC and TH International
Can any of the company-specific risk be diversified away by investing in both Marstons PLC and TH International 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 TH International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marstons PLC and TH International Limited, you can compare the effects of market volatilities on Marstons PLC and TH International 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 TH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marstons PLC and TH International.
Diversification Opportunities for Marstons PLC and TH International
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marstons and THCH is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Marstons PLC and TH International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TH International 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 TH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TH International has no effect on the direction of Marstons PLC i.e., Marstons PLC and TH International go up and down completely randomly.
Pair Corralation between Marstons PLC and TH International
Assuming the 90 days horizon Marstons PLC is expected to generate 0.77 times more return on investment than TH International. However, Marstons PLC is 1.3 times less risky than TH International. It trades about 0.09 of its potential returns per unit of risk. TH International Limited is currently generating about 0.02 per unit of risk. If you would invest 39.00 in Marstons PLC on September 3, 2024 and sell it today you would earn a total of 17.00 from holding Marstons PLC or generate 43.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Marstons PLC vs. TH International Limited
Performance |
| Timeline |
| Marstons PLC |
| TH International |
Marstons PLC and TH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marstons PLC and TH International
The main advantage of trading using opposite Marstons PLC and TH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marstons PLC position performs unexpectedly, TH International 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 TH International will offset losses from the drop in TH International's long position.| Marstons PLC vs. Bagger Daves Burger | Marstons PLC vs. Flanigans Enterprises | Marstons PLC vs. Ark Restaurants Corp | Marstons PLC vs. Spot Coffee |
| TH International vs. Highway Holdings Limited | TH International vs. QCR Holdings | TH International vs. Partner Communications | TH International vs. Acumen Pharmaceuticals |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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