Correlation Between Ruths Hospitality and Marstons PLC
Can any of the company-specific risk be diversified away by investing in both Ruths Hospitality 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 Ruths Hospitality and Marstons PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ruths Hospitality Group and Marstons PLC, you can compare the effects of market volatilities on Ruths Hospitality 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 Ruths Hospitality with a short position of Marstons PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruths Hospitality and Marstons PLC.
Diversification Opportunities for Ruths Hospitality and Marstons PLC
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ruths and Marstons is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ruths Hospitality Group and Marstons PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marstons PLC and Ruths Hospitality 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 Ruths Hospitality Group 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 Ruths Hospitality i.e., Ruths Hospitality and Marstons PLC go up and down completely randomly.
Pair Corralation between Ruths Hospitality and Marstons PLC
If you would invest 41.00 in Marstons PLC on August 24, 2024 and sell it today you would earn a total of 15.00 from holding Marstons PLC or generate 36.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Ruths Hospitality Group vs. Marstons PLC
Performance |
| Timeline |
| Ruths Hospitality |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Marstons PLC |
Ruths Hospitality and Marstons PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruths Hospitality and Marstons PLC
The main advantage of trading using opposite Ruths Hospitality and Marstons PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruths Hospitality 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.| Ruths Hospitality vs. Dine Brands Global | Ruths Hospitality vs. Bloomin Brands | Ruths Hospitality vs. BJs Restaurants | Ruths Hospitality vs. The Cheesecake Factory |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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