Correlation Between Event Hospitality and Marks

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

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

Diversification Opportunities for Event Hospitality and Marks

0.62

Correlation Coefficient

Event Hospitality  Marks

Poor diversification

The 3 months correlation between Event and Marks is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Event Hospitality and and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer and Event 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 Event Hospitality and are associated (or correlated) with Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Event Hospitality i.e., Event Hospitality and Marks go up and down completely randomly.

Pair Corralation between Event Hospitality and Marks

Assuming the 90 days trading horizon Event Hospitality and is expected to under-perform the Marks. But the stock apears to be less risky and, when comparing its historical volatility, Event Hospitality and is 1.05 times less risky than Marks. The stock trades about -0.01 of its potential returns per unit of risk. The Marks and Spencer is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  304.00  in Marks and Spencer on September 24, 2024 and sell it today you would earn a total of  156.00  from holding Marks and Spencer or generate 51.32% return on investment over 90 days.

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

Event Hospitality and  vs.  Marks and Spencer

Event Hospitality

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Event Hospitality and are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Event Hospitality may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Marks and Spencer

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marks and Spencer are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Marks is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Event Hospitality and Marks

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

The idea behind Event Hospitality and and Marks and Spencer 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..