Correlation Between Mitie Group and COSTCO WHOLESALE
Can any of the company-specific risk be diversified away by investing in both Mitie Group and COSTCO WHOLESALE 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 COSTCO WHOLESALE 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 COSTCO WHOLESALE CDR, you can compare the effects of market volatilities on Mitie Group and COSTCO WHOLESALE 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 COSTCO WHOLESALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and COSTCO WHOLESALE.
Diversification Opportunities for Mitie Group and COSTCO WHOLESALE
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitie and COSTCO is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and COSTCO WHOLESALE CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSTCO WHOLESALE CDR 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 COSTCO WHOLESALE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSTCO WHOLESALE CDR has no effect on the direction of Mitie Group i.e., Mitie Group and COSTCO WHOLESALE go up and down completely randomly.
Pair Corralation between Mitie Group and COSTCO WHOLESALE
Assuming the 90 days horizon Mitie Group is expected to generate 17.28 times less return on investment than COSTCO WHOLESALE. In addition to that, Mitie Group is 1.62 times more volatile than COSTCO WHOLESALE CDR. It trades about 0.01 of its total potential returns per unit of risk. COSTCO WHOLESALE CDR is currently generating about 0.28 per unit of volatility. If you would invest 2,655 in COSTCO WHOLESALE CDR on September 1, 2024 and sell it today you would earn a total of 305.00 from holding COSTCO WHOLESALE CDR or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mitie Group PLC vs. COSTCO WHOLESALE CDR
Performance |
| Timeline |
| Mitie Group PLC |
| COSTCO WHOLESALE CDR |
Mitie Group and COSTCO WHOLESALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and COSTCO WHOLESALE
The main advantage of trading using opposite Mitie Group and COSTCO WHOLESALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, COSTCO WHOLESALE 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 COSTCO WHOLESALE will offset losses from the drop in COSTCO WHOLESALE's long position.| Mitie Group vs. Sekisui Chemical Co | Mitie Group vs. Retail Estates NV | Mitie Group vs. COSTCO WHOLESALE CDR | Mitie Group vs. BJs Wholesale Club |
| COSTCO WHOLESALE vs. Air Lease | COSTCO WHOLESALE vs. XLMedia PLC | COSTCO WHOLESALE vs. Hollywood Bowl Group | COSTCO WHOLESALE vs. Beijing Media |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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