Correlation Between Mitie Group and AEON MALL
Can any of the company-specific risk be diversified away by investing in both Mitie Group and AEON MALL 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 AEON MALL 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 AEON MALL LTD, you can compare the effects of market volatilities on Mitie Group and AEON MALL 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 AEON MALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and AEON MALL.
Diversification Opportunities for Mitie Group and AEON MALL
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitie and AEON is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and AEON MALL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON MALL LTD 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 AEON MALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON MALL LTD has no effect on the direction of Mitie Group i.e., Mitie Group and AEON MALL go up and down completely randomly.
Pair Corralation between Mitie Group and AEON MALL
Assuming the 90 days horizon Mitie Group PLC is expected to under-perform the AEON MALL. In addition to that, Mitie Group is 2.2 times more volatile than AEON MALL LTD. It trades about -0.13 of its total potential returns per unit of risk. AEON MALL LTD is currently generating about -0.11 per unit of volatility. If you would invest 1,280 in AEON MALL LTD on August 29, 2024 and sell it today you would lose (70.00) from holding AEON MALL LTD or give up 5.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Mitie Group PLC vs. AEON MALL LTD
Performance |
| Timeline |
| Mitie Group PLC |
| AEON MALL LTD |
Mitie Group and AEON MALL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and AEON MALL
The main advantage of trading using opposite Mitie Group and AEON MALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, AEON MALL 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 AEON MALL will offset losses from the drop in AEON MALL's long position.| Mitie Group vs. Singapore Telecommunications Limited | Mitie Group vs. WillScot Mobile Mini | Mitie Group vs. Cogent Communications Holdings | Mitie Group vs. Iridium Communications |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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