Correlation Between Marstons PLC and Ruths Hospitality

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

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

Diversification Opportunities for Marstons PLC and Ruths Hospitality

0.0

Correlation Coefficient

Marstons PLC  Ruths Hospitality

Pay attention - limited upside

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

Pair Corralation between Marstons PLC and Ruths Hospitality

If you would invest  37.00  in Marstons PLC on September 12, 2024 and sell it today you would earn a total of  14.00  from holding Marstons PLC or generate 37.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.4%
Values	Daily Returns

Marstons PLC  vs.  Ruths Hospitality Group

Marstons PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marstons PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Ruths Hospitality

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Marstons PLC and Ruths Hospitality

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

The idea behind Marstons PLC and Ruths Hospitality 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.