Correlation Between DXC Technology and Mitie Group
Can any of the company-specific risk be diversified away by investing in both DXC Technology 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 DXC Technology and Mitie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DXC Technology Co and Mitie Group PLC, you can compare the effects of market volatilities on DXC Technology 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 DXC Technology with a short position of Mitie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and Mitie Group.
Diversification Opportunities for DXC Technology and Mitie Group
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between DXC and Mitie is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co 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 DXC Technology 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 DXC Technology Co 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 DXC Technology i.e., DXC Technology and Mitie Group go up and down completely randomly.
Pair Corralation between DXC Technology and Mitie Group
Assuming the 90 days trading horizon DXC Technology Co is expected to under-perform the Mitie Group. In addition to that, DXC Technology is 1.66 times more volatile than Mitie Group PLC. It trades about -0.14 of its total potential returns per unit of risk. Mitie Group PLC is currently generating about 0.05 per unit of volatility. If you would invest 11,020 in Mitie Group PLC on December 20, 2024 and sell it today you would earn a total of 360.00 from holding Mitie Group PLC or generate 3.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
DXC Technology Co vs. Mitie Group PLC
Performance |
Timeline |
DXC Technology |
Mitie Group PLC |
DXC Technology and Mitie Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DXC Technology and Mitie Group
The main advantage of trading using opposite DXC Technology and Mitie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology 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.DXC Technology vs. Accesso Technology Group | DXC Technology vs. Micron Technology | DXC Technology vs. Software Circle plc | DXC Technology vs. Compagnie Plastic Omnium |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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