Correlation Between Mitie Group and SINGAPORE POST
Can any of the company-specific risk be diversified away by investing in both Mitie Group and SINGAPORE POST 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 SINGAPORE POST 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 SINGAPORE POST, you can compare the effects of market volatilities on Mitie Group and SINGAPORE POST 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 SINGAPORE POST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and SINGAPORE POST.
Diversification Opportunities for Mitie Group and SINGAPORE POST
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitie and SINGAPORE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and SINGAPORE POST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE POST 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 SINGAPORE POST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE POST has no effect on the direction of Mitie Group i.e., Mitie Group and SINGAPORE POST go up and down completely randomly.
Pair Corralation between Mitie Group and SINGAPORE POST
Assuming the 90 days horizon Mitie Group is expected to generate 1.49 times less return on investment than SINGAPORE POST. But when comparing it to its historical volatility, Mitie Group PLC is 1.06 times less risky than SINGAPORE POST. It trades about 0.03 of its potential returns per unit of risk. SINGAPORE POST is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 29.00 in SINGAPORE POST on August 27, 2024 and sell it today you would earn a total of 7.00 from holding SINGAPORE POST or generate 24.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitie Group PLC vs. SINGAPORE POST
Performance |
| Timeline |
| Mitie Group PLC |
| SINGAPORE POST |
Mitie Group and SINGAPORE POST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and SINGAPORE POST
The main advantage of trading using opposite Mitie Group and SINGAPORE POST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, SINGAPORE POST 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 SINGAPORE POST will offset losses from the drop in SINGAPORE POST's long position.| Mitie Group vs. VIVA WINE GROUP | Mitie Group vs. United Airlines Holdings | Mitie Group vs. DEVRY EDUCATION GRP | Mitie Group vs. Laureate Education |
| SINGAPORE POST vs. Mitsubishi Materials | SINGAPORE POST vs. OFFICE DEPOT | SINGAPORE POST vs. Goodyear Tire Rubber | SINGAPORE POST vs. Eagle 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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