Correlation Between Marston’s PLC and Ondine Biomedical

Can any of the company-specific risk be diversified away by investing in both Marston’s PLC and Ondine Biomedical 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 Marston’s PLC and Ondine Biomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marstons PLC and Ondine Biomedical, you can compare the effects of market volatilities on Marston’s PLC and Ondine Biomedical 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 Marston’s PLC with a short position of Ondine Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marston’s PLC and Ondine Biomedical.

Diversification Opportunities for Marston’s PLC and Ondine Biomedical

-0.05

Correlation Coefficient

Marston’s PLC  Ondine Biomedical

Good diversification

The 3 months correlation between Marston’s and Ondine is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Marstons PLC and Ondine Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ondine Biomedical and Marston’s 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 Ondine Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ondine Biomedical has no effect on the direction of Marston’s PLC i.e., Marston’s PLC and Ondine Biomedical go up and down completely randomly.

Pair Corralation between Marston’s PLC and Ondine Biomedical

Assuming the 90 days trading horizon Marstons PLC is expected to under-perform the Ondine Biomedical. But the stock apears to be less risky and, when comparing its historical volatility, Marstons PLC is 2.36 times less risky than Ondine Biomedical. The stock trades about -0.15 of its potential returns per unit of risk. The Ondine Biomedical is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  900.00  in Ondine Biomedical on December 29, 2024 and sell it today you would earn a total of  125.00  from holding Ondine Biomedical or generate 13.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Marstons PLC  vs.  Ondine Biomedical

Marston’s PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marstons PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ondine Biomedical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ondine Biomedical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Ondine Biomedical exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marston’s PLC and Ondine Biomedical

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

The idea behind Marstons PLC and Ondine Biomedical 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..