Correlation Between VIVA WINE and Mitie Group
Can any of the company-specific risk be diversified away by investing in both VIVA WINE 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 VIVA WINE and Mitie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and Mitie Group PLC, you can compare the effects of market volatilities on VIVA WINE 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 VIVA WINE with a short position of Mitie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and Mitie Group.
Diversification Opportunities for VIVA WINE and Mitie Group
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VIVA and Mitie is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP 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 VIVA WINE 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 VIVA WINE GROUP 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 VIVA WINE i.e., VIVA WINE and Mitie Group go up and down completely randomly.
Pair Corralation between VIVA WINE and Mitie Group
Assuming the 90 days horizon VIVA WINE GROUP is expected to under-perform the Mitie Group. But the stock apears to be less risky and, when comparing its historical volatility, VIVA WINE GROUP is 1.92 times less risky than Mitie Group. The stock trades about -0.12 of its potential returns per unit of risk. The Mitie Group PLC is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 118,650 in Mitie Group PLC on August 30, 2024 and sell it today you would lose (1,050) from holding Mitie Group PLC or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIVA WINE GROUP vs. Mitie Group PLC
Performance |
| Timeline |
| VIVA WINE GROUP |
| Mitie Group PLC |
VIVA WINE and Mitie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and Mitie Group
The main advantage of trading using opposite VIVA WINE and Mitie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE 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.The idea behind VIVA WINE GROUP and Mitie Group PLC 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.| Mitie Group vs. Vastned Retail NV | Mitie Group vs. JIAHUA STORES | Mitie Group vs. BJs Wholesale Club | Mitie Group vs. Fast Retailing Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |