Correlation Between Mitie Group and TFS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Mitie Group and TFS FINANCIAL 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 TFS FINANCIAL 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 TFS FINANCIAL, you can compare the effects of market volatilities on Mitie Group and TFS FINANCIAL 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 TFS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and TFS FINANCIAL.
Diversification Opportunities for Mitie Group and TFS FINANCIAL
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mitie and TFS is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS FINANCIAL 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 TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of Mitie Group i.e., Mitie Group and TFS FINANCIAL go up and down completely randomly.
Pair Corralation between Mitie Group and TFS FINANCIAL
Assuming the 90 days horizon Mitie Group PLC is expected to under-perform the TFS FINANCIAL. In addition to that, Mitie Group is 1.26 times more volatile than TFS FINANCIAL. It trades about 0.0 of its total potential returns per unit of risk. TFS FINANCIAL is currently generating about 0.04 per unit of volatility. If you would invest 957.00 in TFS FINANCIAL on November 28, 2024 and sell it today you would earn a total of 293.00 from holding TFS FINANCIAL or generate 30.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Mitie Group PLC vs. TFS FINANCIAL
Performance |
| Timeline |
| Mitie Group PLC |
| TFS FINANCIAL |
Mitie Group and TFS FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and TFS FINANCIAL
The main advantage of trading using opposite Mitie Group and TFS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, TFS FINANCIAL 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 TFS FINANCIAL will offset losses from the drop in TFS FINANCIAL's long position.| Mitie Group vs. Tencent Music Entertainment | Mitie Group vs. NORTHISLE PERGOLD INC | Mitie Group vs. COFCO Joycome Foods | Mitie Group vs. GALENA MINING LTD |
| TFS FINANCIAL vs. GOLDQUEST MINING | TFS FINANCIAL vs. Summit Hotel Properties | TFS FINANCIAL vs. FIREWEED METALS P | TFS FINANCIAL vs. Choice Hotels International |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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