Correlation Between Marstons PLC and Bagger Daves

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

By analyzing existing cross correlation between Marstons PLC and Bagger Daves Burger, you can compare the effects of market volatilities on Marstons PLC and Bagger Daves 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 Bagger Daves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marstons PLC and Bagger Daves.

Diversification Opportunities for Marstons PLC and Bagger Daves

-0.78

Correlation Coefficient

Marstons PLC  Bagger Daves

Pay attention - limited upside

The 3 months correlation between Marstons and Bagger is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Marstons PLC and Bagger Daves Burger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bagger Daves Burger 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 Bagger Daves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bagger Daves Burger has no effect on the direction of Marstons PLC i.e., Marstons PLC and Bagger Daves go up and down completely randomly.

Pair Corralation between Marstons PLC and Bagger Daves

Assuming the 90 days horizon Marstons PLC is expected to generate 1.68 times more return on investment than Bagger Daves. However, Marstons PLC is 1.68 times more volatile than Bagger Daves Burger. It trades about 0.03 of its potential returns per unit of risk. Bagger Daves Burger is currently generating about -0.22 per unit of risk. If you would invest  428.00  in Marstons PLC on December 27, 2024 and sell it today you would earn a total of  15.00  from holding Marstons PLC or generate 3.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Marstons PLC  vs.  Bagger Daves Burger

Marstons PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marstons PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Marstons PLC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bagger Daves Burger

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bagger Daves Burger has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Marstons PLC and Bagger Daves

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

The idea behind Marstons PLC and Bagger Daves Burger 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.