Correlation Between Mitie Group and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Mitie Group and Westinghouse Air 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 Westinghouse Air 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 Westinghouse Air Brake, you can compare the effects of market volatilities on Mitie Group and Westinghouse Air 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 Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and Westinghouse Air.
Diversification Opportunities for Mitie Group and Westinghouse Air
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitie and Westinghouse is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake 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 Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of Mitie Group i.e., Mitie Group and Westinghouse Air go up and down completely randomly.
Pair Corralation between Mitie Group and Westinghouse Air
Assuming the 90 days horizon Mitie Group is expected to generate 22.96 times less return on investment than Westinghouse Air. In addition to that, Mitie Group is 1.41 times more volatile than Westinghouse Air Brake. It trades about 0.0 of its total potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.14 per unit of volatility. If you would invest 9,075 in Westinghouse Air Brake on August 31, 2024 and sell it today you would earn a total of 9,825 from holding Westinghouse Air Brake or generate 108.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Mitie Group PLC vs. Westinghouse Air Brake
Performance |
| Timeline |
| Mitie Group PLC |
| Westinghouse Air Brake |
Mitie Group and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and Westinghouse Air
The main advantage of trading using opposite Mitie Group and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air's long position.| Mitie Group vs. FIREWEED METALS P | Mitie Group vs. MIRAMAR HOTEL INV | Mitie Group vs. DALATA HOTEL | Mitie Group vs. HYATT HOTELS A |
| Westinghouse Air vs. Union Pacific | Westinghouse Air vs. Superior Plus Corp | Westinghouse Air vs. NMI Holdings | Westinghouse Air vs. Origin Agritech |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |