Correlation Between Mitie Group and KEYCORP
Can any of the company-specific risk be diversified away by investing in both Mitie Group and KEYCORP 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 KEYCORP 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 KEYCORP, you can compare the effects of market volatilities on Mitie Group and KEYCORP 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 KEYCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and KEYCORP.
Diversification Opportunities for Mitie Group and KEYCORP
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitie and KEYCORP is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and KEYCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYCORP 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 KEYCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEYCORP has no effect on the direction of Mitie Group i.e., Mitie Group and KEYCORP go up and down completely randomly.
Pair Corralation between Mitie Group and KEYCORP
Assuming the 90 days horizon Mitie Group PLC is expected to under-perform the KEYCORP. But the stock apears to be less risky and, when comparing its historical volatility, Mitie Group PLC is 1.38 times less risky than KEYCORP. The stock trades about -0.01 of its potential returns per unit of risk. The KEYCORP is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,449 in KEYCORP on August 28, 2024 and sell it today you would earn a total of 414.00 from holding KEYCORP or generate 28.57% 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. KEYCORP
Performance |
| Timeline |
| Mitie Group PLC |
| KEYCORP |
Mitie Group and KEYCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and KEYCORP
The main advantage of trading using opposite Mitie Group and KEYCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, KEYCORP 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 KEYCORP will offset losses from the drop in KEYCORP's long position.| Mitie Group vs. WisdomTree Investments | Mitie Group vs. REINET INVESTMENTS SCA | Mitie Group vs. MCEWEN MINING INC | Mitie Group vs. Lion One Metals |
| KEYCORP vs. CONAGRA FOODS | KEYCORP vs. Aluminum of | KEYCORP vs. Performance Food Group | KEYCORP vs. United Natural Foods |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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