Correlation Between AcadeMedia and Mitie Group
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and Mitie Group 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 AcadeMedia and Mitie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Mitie Group PLC, you can compare the effects of market volatilities on AcadeMedia and Mitie Group 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 AcadeMedia with a short position of Mitie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Mitie Group.
Diversification Opportunities for AcadeMedia and Mitie Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AcadeMedia and Mitie is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Mitie Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitie Group PLC and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with Mitie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitie Group PLC has no effect on the direction of AcadeMedia i.e., AcadeMedia and Mitie Group go up and down completely randomly.
Pair Corralation between AcadeMedia and Mitie Group
Assuming the 90 days trading horizon AcadeMedia AB is expected to generate 0.91 times more return on investment than Mitie Group. However, AcadeMedia AB is 1.1 times less risky than Mitie Group. It trades about 0.08 of its potential returns per unit of risk. Mitie Group PLC is currently generating about 0.02 per unit of risk. If you would invest 4,793 in AcadeMedia AB on September 14, 2024 and sell it today you would earn a total of 1,777 from holding AcadeMedia AB or generate 37.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AcadeMedia AB vs. Mitie Group PLC
Performance |
| Timeline |
| AcadeMedia AB |
| Mitie Group PLC |
AcadeMedia and Mitie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Mitie Group
The main advantage of trading using opposite AcadeMedia and Mitie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, Mitie Group 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 Mitie Group will offset losses from the drop in Mitie Group's long position.| AcadeMedia vs. Indutrade AB | AcadeMedia vs. Panther Metals PLC | AcadeMedia vs. Jacquet Metal Service | AcadeMedia vs. AMG Advanced Metallurgical |
| Mitie Group vs. Centaur Media | Mitie Group vs. AcadeMedia AB | Mitie Group vs. Prosiebensat 1 Media | Mitie Group vs. Catena Media PLC |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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