Correlation Between Nathans Famous and Marstons PLC
Can any of the company-specific risk be diversified away by investing in both Nathans Famous 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 Nathans Famous and Marstons PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nathans Famous and Marstons PLC, you can compare the effects of market volatilities on Nathans Famous 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 Nathans Famous with a short position of Marstons PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nathans Famous and Marstons PLC.
Diversification Opportunities for Nathans Famous and Marstons PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nathans and Marstons is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nathans Famous and Marstons PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marstons PLC and Nathans Famous 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 Nathans Famous 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 Nathans Famous i.e., Nathans Famous and Marstons PLC go up and down completely randomly.
Pair Corralation between Nathans Famous and Marstons PLC
Given the investment horizon of 90 days Nathans Famous is expected to generate 0.39 times more return on investment than Marstons PLC. However, Nathans Famous is 2.58 times less risky than Marstons PLC. It trades about 0.04 of its potential returns per unit of risk. Marstons PLC is currently generating about 0.01 per unit of risk. If you would invest 6,601 in Nathans Famous on August 28, 2024 and sell it today you would earn a total of 1,858 from holding Nathans Famous or generate 28.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Nathans Famous vs. Marstons PLC
Performance |
| Timeline |
| Nathans Famous |
| Marstons PLC |
Nathans Famous and Marstons PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nathans Famous and Marstons PLC
The main advantage of trading using opposite Nathans Famous and Marstons PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nathans Famous 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.| Nathans Famous vs. Noble Romans | Nathans Famous vs. Good Times Restaurants | Nathans Famous vs. Bagger Daves Burger | Nathans Famous vs. Flanigans Enterprises |
| Marstons PLC vs. Marstons PLC | Marstons PLC vs. Bagger Daves Burger | Marstons PLC vs. Alsea SAB de | Marstons PLC vs. Spot Coffee |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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