Correlation Between Mitie Group and MAGNA INTL
Can any of the company-specific risk be diversified away by investing in both Mitie Group and MAGNA INTL 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 MAGNA INTL 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 MAGNA INTL, you can compare the effects of market volatilities on Mitie Group and MAGNA INTL 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 MAGNA INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and MAGNA INTL.
Diversification Opportunities for Mitie Group and MAGNA INTL
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitie and MAGNA is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and MAGNA INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNA INTL 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 MAGNA INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNA INTL has no effect on the direction of Mitie Group i.e., Mitie Group and MAGNA INTL go up and down completely randomly.
Pair Corralation between Mitie Group and MAGNA INTL
Assuming the 90 days horizon Mitie Group PLC is expected to under-perform the MAGNA INTL. In addition to that, Mitie Group is 1.2 times more volatile than MAGNA INTL. It trades about -0.03 of its total potential returns per unit of risk. MAGNA INTL is currently generating about 0.03 per unit of volatility. If you would invest 4,063 in MAGNA INTL on September 1, 2024 and sell it today you would earn a total of 164.00 from holding MAGNA INTL or generate 4.04% 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. MAGNA INTL
Performance |
Timeline |
Mitie Group PLC |
MAGNA INTL |
Mitie Group and MAGNA INTL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mitie Group and MAGNA INTL
The main advantage of trading using opposite Mitie Group and MAGNA INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, MAGNA INTL 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 MAGNA INTL will offset losses from the drop in MAGNA INTL'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 |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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