Correlation Between Mitie Group and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both Mitie Group and UNITED RENTALS 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 UNITED RENTALS 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 UNITED RENTALS, you can compare the effects of market volatilities on Mitie Group and UNITED RENTALS 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 UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and UNITED RENTALS.
Diversification Opportunities for Mitie Group and UNITED RENTALS
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitie and UNITED is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS 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 UNITED RENTALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED RENTALS has no effect on the direction of Mitie Group i.e., Mitie Group and UNITED RENTALS go up and down completely randomly.
Pair Corralation between Mitie Group and UNITED RENTALS
Assuming the 90 days horizon Mitie Group PLC is expected to under-perform the UNITED RENTALS. In addition to that, Mitie Group is 1.2 times more volatile than UNITED RENTALS. It trades about -0.03 of its total potential returns per unit of risk. UNITED RENTALS is currently generating about 0.17 per unit of volatility. If you would invest 74,970 in UNITED RENTALS on August 29, 2024 and sell it today you would earn a total of 7,050 from holding UNITED RENTALS or generate 9.4% 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. UNITED RENTALS
Performance |
| Timeline |
| Mitie Group PLC |
| UNITED RENTALS |
Mitie Group and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and UNITED RENTALS
The main advantage of trading using opposite Mitie Group and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, UNITED RENTALS 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 UNITED RENTALS will offset losses from the drop in UNITED RENTALS's long position.| Mitie Group vs. Apollo Investment Corp | Mitie Group vs. SMA Solar Technology | Mitie Group vs. DXC Technology Co | Mitie Group vs. AECOM TECHNOLOGY |
| UNITED RENTALS vs. Laureate Education | UNITED RENTALS vs. Darden Restaurants | UNITED RENTALS vs. MEDICAL FACILITIES NEW | UNITED RENTALS vs. ScanSource |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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