Correlation Between Mitie Group and Brambles
Can any of the company-specific risk be diversified away by investing in both Mitie Group and Brambles 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 Mitie Group and Brambles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitie Group Plc and Brambles Ltd ADR, you can compare the effects of market volatilities on Mitie Group and Brambles 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 Mitie Group with a short position of Brambles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and Brambles.
Diversification Opportunities for Mitie Group and Brambles
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mitie and Brambles is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group Plc and Brambles Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brambles ADR and Mitie Group 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 Mitie Group Plc are associated (or correlated) with Brambles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brambles ADR has no effect on the direction of Mitie Group i.e., Mitie Group and Brambles go up and down completely randomly.
Pair Corralation between Mitie Group and Brambles
Assuming the 90 days horizon Mitie Group Plc is expected to generate 2.39 times more return on investment than Brambles. However, Mitie Group is 2.39 times more volatile than Brambles Ltd ADR. It trades about 0.08 of its potential returns per unit of risk. Brambles Ltd ADR is currently generating about 0.05 per unit of risk. 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitie Group Plc vs. Brambles Ltd ADR
Performance |
| Timeline |
| Mitie Group Plc |
| Brambles ADR |
Mitie Group and Brambles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and Brambles
The main advantage of trading using opposite Mitie Group and Brambles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, Brambles 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 Brambles will offset losses from the drop in Brambles' long position.| Mitie Group vs. Intertek Group Plc | Mitie Group vs. Wildpack Beverage | Mitie Group vs. DATA Communications Management | Mitie Group vs. Dexterra Group |
| Brambles vs. Cintas | Brambles vs. Thomson Reuters Corp | Brambles vs. Global Payments | Brambles vs. Wolters Kluwer NV |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| 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 |