Correlation Between Mitie Group and Dexterra
Can any of the company-specific risk be diversified away by investing in both Mitie Group and Dexterra 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 Dexterra 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 Dexterra Group, you can compare the effects of market volatilities on Mitie Group and Dexterra 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 Dexterra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and Dexterra.
Diversification Opportunities for Mitie Group and Dexterra
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitie and Dexterra is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group Plc and Dexterra Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexterra Group 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 Dexterra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexterra Group has no effect on the direction of Mitie Group i.e., Mitie Group and Dexterra go up and down completely randomly.
Pair Corralation between Mitie Group and Dexterra
Assuming the 90 days horizon Mitie Group Plc is expected to generate 1.72 times more return on investment than Dexterra. However, Mitie Group is 1.72 times more volatile than Dexterra Group. It trades about 0.08 of its potential returns per unit of risk. Dexterra Group is currently generating about 0.03 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 Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Mitie Group Plc vs. Dexterra Group
Performance |
| Timeline |
| Mitie Group Plc |
| Dexterra Group |
Mitie Group and Dexterra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and Dexterra
The main advantage of trading using opposite Mitie Group and Dexterra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, Dexterra 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 Dexterra will offset losses from the drop in Dexterra's long position.| Mitie Group vs. Intertek Group Plc | Mitie Group vs. Wildpack Beverage | Mitie Group vs. DATA Communications Management | Mitie Group vs. Dexterra Group |
| Dexterra vs. Intertek Group Plc | Dexterra vs. Wildpack Beverage | Dexterra vs. DATA Communications Management | Dexterra vs. Mitie Group 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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