Correlation Between Mitie Group and Cintas
Can any of the company-specific risk be diversified away by investing in both Mitie Group and Cintas 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 Cintas 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 Cintas, you can compare the effects of market volatilities on Mitie Group and Cintas 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 Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and Cintas.
Diversification Opportunities for Mitie Group and Cintas
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mitie and Cintas is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group Plc and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas 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 Cintas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cintas has no effect on the direction of Mitie Group i.e., Mitie Group and Cintas go up and down completely randomly.
Pair Corralation between Mitie Group and Cintas
Assuming the 90 days horizon Mitie Group is expected to generate 2.33 times less return on investment than Cintas. In addition to that, Mitie Group is 1.74 times more volatile than Cintas. It trades about 0.04 of its total potential returns per unit of risk. Cintas is currently generating about 0.15 per unit of volatility. If you would invest 11,953 in Cintas on September 4, 2024 and sell it today you would earn a total of 10,311 from holding Cintas or generate 86.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Mitie Group Plc vs. Cintas
Performance |
| Timeline |
| Mitie Group Plc |
| Cintas |
Mitie Group and Cintas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and Cintas
The main advantage of trading using opposite Mitie Group and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, Cintas 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 Cintas will offset losses from the drop in Cintas' long position.| Mitie Group vs. Cintas | Mitie Group vs. Thomson Reuters Corp | Mitie Group vs. Global Payments | Mitie Group vs. RB Global |
| Cintas vs. ABM Industries Incorporated | Cintas vs. Copart Inc | Cintas vs. Dolby Laboratories | Cintas vs. Relx PLC ADR |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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