Correlation Between Marks and Marks Spencer

Can any of the company-specific risk be diversified away by investing in both Marks and Marks Spencer 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 Marks and Marks Spencer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marks and Spencer and Marks Spencer Group, you can compare the effects of market volatilities on Marks and Marks Spencer 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 Marks with a short position of Marks Spencer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marks and Marks Spencer.

Diversification Opportunities for Marks and Marks Spencer

0.56

Correlation Coefficient

Marks  Marks Spencer

Very weak diversification

The 3 months correlation between Marks and Marks is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Marks and Spencer and Marks Spencer Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks Spencer Group and Marks 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 Marks and Spencer are associated (or correlated) with Marks Spencer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks Spencer Group has no effect on the direction of Marks i.e., Marks and Marks Spencer go up and down completely randomly.

Pair Corralation between Marks and Marks Spencer

Assuming the 90 days horizon Marks and Spencer is expected to under-perform the Marks Spencer. In addition to that, Marks is 1.33 times more volatile than Marks Spencer Group. It trades about -0.04 of its total potential returns per unit of risk. Marks Spencer Group is currently generating about 0.01 per unit of volatility. If you would invest  948.00  in Marks Spencer Group on December 29, 2024 and sell it today you would lose (8.00) from holding Marks Spencer Group or give up 0.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Marks and Spencer  vs.  Marks Spencer Group

Marks and Spencer

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marks and Spencer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Marks Spencer Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marks Spencer Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Marks Spencer is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Marks and Marks Spencer

The main advantage of trading using opposite Marks and Marks Spencer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marks position performs unexpectedly, Marks Spencer 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 Marks Spencer will offset losses from the drop in Marks Spencer's long position.

The idea behind Marks and Spencer and Marks Spencer Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .