Correlation Between Mitie Group and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Mitie Group and SENECA FOODS-A 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 SENECA FOODS-A 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 SENECA FOODS A, you can compare the effects of market volatilities on Mitie Group and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and SENECA FOODS-A.
Diversification Opportunities for Mitie Group and SENECA FOODS-A
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitie and SENECA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Mitie Group i.e., Mitie Group and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Mitie Group and SENECA FOODS-A
Assuming the 90 days horizon Mitie Group PLC is expected to under-perform the SENECA FOODS-A. But the stock apears to be less risky and, when comparing its historical volatility, Mitie Group PLC is 1.48 times less risky than SENECA FOODS-A. The stock trades about -0.01 of its potential returns per unit of risk. The SENECA FOODS A is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6,500 in SENECA FOODS A on August 28, 2024 and sell it today you would earn a total of 250.00 from holding SENECA FOODS A or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitie Group PLC vs. SENECA FOODS A
Performance |
| Timeline |
| Mitie Group PLC |
| SENECA FOODS A |
Mitie Group and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitie Group and SENECA FOODS-A
The main advantage of trading using opposite Mitie Group and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A's long position.| Mitie Group vs. WisdomTree Investments | Mitie Group vs. REINET INVESTMENTS SCA | Mitie Group vs. MCEWEN MINING INC | Mitie Group vs. Lion One Metals |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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