Correlation Between Mitie Group and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Mitie Group and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL, you can compare the effects of market volatilities on Mitie Group and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and KINGBOARD CHEMICAL.
Diversification Opportunities for Mitie Group and KINGBOARD CHEMICAL
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mitie and KINGBOARD is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of Mitie Group i.e., Mitie Group and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between Mitie Group and KINGBOARD CHEMICAL
Assuming the 90 days horizon Mitie Group PLC is expected to generate 1.43 times more return on investment than KINGBOARD CHEMICAL. However, Mitie Group is 1.43 times more volatile than KINGBOARD CHEMICAL. It trades about 0.01 of its potential returns per unit of risk. KINGBOARD CHEMICAL is currently generating about -0.01 per unit of risk. If you would invest 117,850 in Mitie Group PLC on September 1, 2024 and sell it today you would lose (350.00) from holding Mitie Group PLC or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mitie Group PLC vs. KINGBOARD CHEMICAL
Performance |
| Timeline |
| Mitie Group PLC |
| KINGBOARD CHEMICAL |
Mitie Group and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and KINGBOARD CHEMICAL
The main advantage of trading using opposite Mitie Group and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL'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 |
| KINGBOARD CHEMICAL vs. TSOGO SUN GAMING | KINGBOARD CHEMICAL vs. NEWELL RUBBERMAID | KINGBOARD CHEMICAL vs. Boyd Gaming | KINGBOARD CHEMICAL vs. Martin Marietta Materials |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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