Correlation Between Miton UK and United States
Can any of the company-specific risk be diversified away by investing in both Miton UK and United States 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 Miton UK and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miton UK MicroCap and United States Steel, you can compare the effects of market volatilities on Miton UK and United States 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 Miton UK with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miton UK and United States.
Diversification Opportunities for Miton UK and United States
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Miton and United is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Miton UK MicroCap and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel and Miton UK 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 Miton UK MicroCap are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Miton UK i.e., Miton UK and United States go up and down completely randomly.
Pair Corralation between Miton UK and United States
Assuming the 90 days trading horizon Miton UK is expected to generate 1.49 times less return on investment than United States. But when comparing it to its historical volatility, Miton UK MicroCap is 7.06 times less risky than United States. It trades about 0.21 of its potential returns per unit of risk. United States Steel is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,935 in United States Steel on August 30, 2024 and sell it today you would earn a total of 90.00 from holding United States Steel or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miton UK MicroCap vs. United States Steel
Performance |
| Timeline |
| Miton UK MicroCap |
| United States Steel |
Miton UK and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miton UK and United States
The main advantage of trading using opposite Miton UK and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miton UK position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Miton UK vs. Sabre Insurance Group | Miton UK vs. Vienna Insurance Group | Miton UK vs. Schroders Investment Trusts | Miton UK vs. Herald Investment Trust |
| United States vs. Tungsten West PLC | United States vs. Argo Group Limited | United States vs. Hardide PLC | United States vs. Versarien 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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