Correlation Between AZZ Incorporated and Mitie Group
Can any of the company-specific risk be diversified away by investing in both AZZ Incorporated 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 AZZ Incorporated and Mitie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AZZ Incorporated and Mitie Group Plc, you can compare the effects of market volatilities on AZZ Incorporated 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 AZZ Incorporated with a short position of Mitie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AZZ Incorporated and Mitie Group.
Diversification Opportunities for AZZ Incorporated and Mitie Group
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AZZ and Mitie is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding AZZ Incorporated 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 AZZ Incorporated 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 AZZ Incorporated 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 AZZ Incorporated i.e., AZZ Incorporated and Mitie Group go up and down completely randomly.
Pair Corralation between AZZ Incorporated and Mitie Group
Considering the 90-day investment horizon AZZ Incorporated is expected to generate 1.29 times less return on investment than Mitie Group. But when comparing it to its historical volatility, AZZ Incorporated is 1.77 times less risky than Mitie Group. It trades about 0.1 of its potential returns per unit of risk. Mitie Group Plc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 560.00 in Mitie Group Plc on November 3, 2024 and sell it today you would earn a total of 21.00 from holding Mitie Group Plc or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
AZZ Incorporated vs. Mitie Group Plc
Performance |
| Timeline |
| AZZ Incorporated |
| Mitie Group Plc |
AZZ Incorporated and Mitie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AZZ Incorporated and Mitie Group
The main advantage of trading using opposite AZZ Incorporated and Mitie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AZZ Incorporated 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.| AZZ Incorporated vs. Maximus | AZZ Incorporated vs. ABM Industries Incorporated | AZZ Incorporated vs. CBIZ Inc | AZZ Incorporated vs. Cass Information Systems |
| Mitie Group vs. Intertek Group Plc | Mitie Group vs. Wildpack Beverage | Mitie Group vs. DATA Communications Management | Mitie Group vs. Dexterra Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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