Correlation Between Marstons PLC and Just Kitchen

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

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

Diversification Opportunities for Marstons PLC and Just Kitchen

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Correlation Coefficient

Marstons PLC  Just Kitchen

Pay attention - limited upside

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

Pair Corralation between Marstons PLC and Just Kitchen

Assuming the 90 days horizon Marstons PLC is expected to generate 1.94 times less return on investment than Just Kitchen. But when comparing it to its historical volatility, Marstons PLC is 2.45 times less risky than Just Kitchen. It trades about 0.02 of its potential returns per unit of risk. Just Kitchen Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8.45  in Just Kitchen Holdings on September 1, 2024 and sell it today you would lose (2.09) from holding Just Kitchen Holdings or give up 24.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	30.91%
Values	Daily Returns

Marstons PLC  vs.  Just Kitchen Holdings

Marstons PLC

Risk-Adjusted Performance

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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 fairly strong basic indicators, Marstons PLC is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Just Kitchen Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Just Kitchen Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Just Kitchen is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Marstons PLC and Just Kitchen

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

The idea behind Marstons PLC and Just Kitchen Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.