Correlation Between Marstons PLC and Fiesta Restaurant

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

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

Diversification Opportunities for Marstons PLC and Fiesta Restaurant

0.0

Correlation Coefficient

Marstons PLC  Fiesta Restaurant

Pay attention - limited upside

The 3 months correlation between Marstons and Fiesta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marstons PLC and Fiesta Restaurant Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiesta Restaurant 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 Fiesta Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiesta Restaurant has no effect on the direction of Marstons PLC i.e., Marstons PLC and Fiesta Restaurant go up and down completely randomly.

Pair Corralation between Marstons PLC and Fiesta Restaurant

If you would invest  428.00  in Marstons PLC on December 30, 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	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Marstons PLC  vs.  Fiesta Restaurant Group

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.

Fiesta Restaurant

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fiesta Restaurant Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Fiesta Restaurant is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Marstons PLC and Fiesta Restaurant

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

The idea behind Marstons PLC and Fiesta Restaurant 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.