Correlation Between Mitie Group and CHENIERE ENERGY
Can any of the company-specific risk be diversified away by investing in both Mitie Group and CHENIERE ENERGY 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 CHENIERE ENERGY 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 CHENIERE ENERGY, you can compare the effects of market volatilities on Mitie Group and CHENIERE ENERGY 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 CHENIERE ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and CHENIERE ENERGY.
Diversification Opportunities for Mitie Group and CHENIERE ENERGY
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitie and CHENIERE is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and CHENIERE ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHENIERE ENERGY 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 CHENIERE ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHENIERE ENERGY has no effect on the direction of Mitie Group i.e., Mitie Group and CHENIERE ENERGY go up and down completely randomly.
Pair Corralation between Mitie Group and CHENIERE ENERGY
Assuming the 90 days horizon Mitie Group is expected to generate 8.52 times less return on investment than CHENIERE ENERGY. In addition to that, Mitie Group is 1.36 times more volatile than CHENIERE ENERGY. It trades about 0.01 of its total potential returns per unit of risk. CHENIERE ENERGY is currently generating about 0.09 per unit of volatility. If you would invest 13,060 in CHENIERE ENERGY on September 2, 2024 and sell it today you would earn a total of 7,950 from holding CHENIERE ENERGY or generate 60.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitie Group PLC vs. CHENIERE ENERGY
Performance |
| Timeline |
| Mitie Group PLC |
| CHENIERE ENERGY |
Mitie Group and CHENIERE ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and CHENIERE ENERGY
The main advantage of trading using opposite Mitie Group and CHENIERE ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, CHENIERE ENERGY 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 CHENIERE ENERGY will offset losses from the drop in CHENIERE ENERGY's long position.| Mitie Group vs. BE Semiconductor Industries | Mitie Group vs. MagnaChip Semiconductor Corp | Mitie Group vs. Tower Semiconductor | Mitie Group vs. SOFI TECHNOLOGIES |
| CHENIERE ENERGY vs. Perdoceo Education | CHENIERE ENERGY vs. Adtalem Global Education | CHENIERE ENERGY vs. CHINA EDUCATION GROUP | CHENIERE ENERGY vs. Harmony Gold Mining |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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