Correlation Between RB Global and Mitie Group
Can any of the company-specific risk be diversified away by investing in both RB Global and Mitie Group 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 RB Global and Mitie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RB Global and Mitie Group Plc, you can compare the effects of market volatilities on RB Global and Mitie Group 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 RB Global with a short position of Mitie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of RB Global and Mitie Group.
Diversification Opportunities for RB Global and Mitie Group
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RBA and Mitie is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding RB Global and Mitie Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitie Group Plc and RB Global 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 RB Global are associated (or correlated) with Mitie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitie Group Plc has no effect on the direction of RB Global i.e., RB Global and Mitie Group go up and down completely randomly.
Pair Corralation between RB Global and Mitie Group
Considering the 90-day investment horizon RB Global is expected to generate 0.56 times more return on investment than Mitie Group. However, RB Global is 1.79 times less risky than Mitie Group. It trades about 0.14 of its potential returns per unit of risk. Mitie Group Plc is currently generating about -0.07 per unit of risk. If you would invest 8,490 in RB Global on September 12, 2024 and sell it today you would earn a total of 1,125 from holding RB Global or generate 13.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
RB Global vs. Mitie Group Plc
Performance |
Timeline |
RB Global |
Mitie Group Plc |
RB Global and Mitie Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RB Global and Mitie Group
The main advantage of trading using opposite RB Global and Mitie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RB Global position performs unexpectedly, Mitie Group 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 Mitie Group will offset losses from the drop in Mitie Group's long position.The idea behind RB Global and Mitie Group Plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Mitie Group vs. Intertek Group Plc | Mitie Group vs. Wildpack Beverage | Mitie Group vs. DATA Communications Management | Mitie Group vs. Dexterra Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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