Correlation Between Mitie Group and Impinj

Can any of the company-specific risk be diversified away by investing in both Mitie Group and Impinj 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 Impinj 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 Impinj Inc, you can compare the effects of market volatilities on Mitie Group and Impinj 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 Impinj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitie Group and Impinj.

Diversification Opportunities for Mitie Group and Impinj

0.62

Correlation Coefficient

Mitie Group  Impinj

Poor diversification

The 3 months correlation between Mitie and Impinj is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and Impinj Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impinj Inc 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 Impinj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impinj Inc has no effect on the direction of Mitie Group i.e., Mitie Group and Impinj go up and down completely randomly.

Pair Corralation between Mitie Group and Impinj

Assuming the 90 days horizon Mitie Group PLC is expected to generate 0.31 times more return on investment than Impinj. However, Mitie Group PLC is 3.2 times less risky than Impinj. It trades about 0.11 of its potential returns per unit of risk. Impinj Inc is currently generating about -0.46 per unit of risk. If you would invest  113,600  in Mitie Group PLC on September 23, 2024 and sell it today you would earn a total of  2,450  from holding Mitie Group PLC or generate 2.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Mitie Group PLC  vs.  Impinj Inc

Mitie Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitie Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Mitie Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Impinj Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impinj Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Mitie Group and Impinj

The main advantage of trading using opposite Mitie Group and Impinj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitie Group position performs unexpectedly, Impinj 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 Impinj will offset losses from the drop in Impinj's long position.

The idea behind Mitie Group PLC and Impinj Inc 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.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.