Correlation Between Mitie Group and CEWE Stiftung
Can any of the company-specific risk be diversified away by investing in both Mitie Group and CEWE Stiftung 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 CEWE Stiftung 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 CEWE Stiftung Co, you can compare the effects of market volatilities on Mitie Group and CEWE Stiftung 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 CEWE Stiftung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and CEWE Stiftung.
Diversification Opportunities for Mitie Group and CEWE Stiftung
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mitie and CEWE is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and CEWE Stiftung Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEWE Stiftung 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 CEWE Stiftung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEWE Stiftung has no effect on the direction of Mitie Group i.e., Mitie Group and CEWE Stiftung go up and down completely randomly.
Pair Corralation between Mitie Group and CEWE Stiftung
Assuming the 90 days horizon Mitie Group PLC is expected to under-perform the CEWE Stiftung. In addition to that, Mitie Group is 1.51 times more volatile than CEWE Stiftung Co. It trades about -0.01 of its total potential returns per unit of risk. CEWE Stiftung Co is currently generating about 0.03 per unit of volatility. If you would invest 8,358 in CEWE Stiftung Co on September 5, 2024 and sell it today you would earn a total of 1,492 from holding CEWE Stiftung Co or generate 17.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitie Group PLC vs. CEWE Stiftung Co
Performance |
| Timeline |
| Mitie Group PLC |
| CEWE Stiftung |
Mitie Group and CEWE Stiftung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and CEWE Stiftung
The main advantage of trading using opposite Mitie Group and CEWE Stiftung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, CEWE Stiftung 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 CEWE Stiftung will offset losses from the drop in CEWE Stiftung's long position.| Mitie Group vs. G8 EDUCATION | Mitie Group vs. Xinhua Winshare Publishing | Mitie Group vs. Tsingtao Brewery | Mitie Group vs. IDP EDUCATION LTD |
| CEWE Stiftung vs. BOYD GROUP SERVICES | CEWE Stiftung vs. Frontdoor | CEWE Stiftung vs. CVS Group plc | CEWE Stiftung vs. Gesundheitswelt Chiemgau AG |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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