Correlation Between Mitie Group and SINGAPORE AIRLINES

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

Diversification Opportunities for Mitie Group and SINGAPORE AIRLINES

-0.36

Correlation Coefficient

Mitie Group  SINGAPORE AIRLINES

Very good diversification

The 3 months correlation between Mitie and SINGAPORE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES 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 SINGAPORE AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE AIRLINES has no effect on the direction of Mitie Group i.e., Mitie Group and SINGAPORE AIRLINES go up and down completely randomly.

Pair Corralation between Mitie Group and SINGAPORE AIRLINES

Assuming the 90 days horizon Mitie Group is expected to generate 3.68 times less return on investment than SINGAPORE AIRLINES. In addition to that, Mitie Group is 1.94 times more volatile than SINGAPORE AIRLINES. It trades about 0.02 of its total potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.17 per unit of volatility. If you would invest  441.00  in SINGAPORE AIRLINES on December 1, 2024 and sell it today you would earn a total of  39.00  from holding SINGAPORE AIRLINES or generate 8.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Mitie Group PLC  vs.  SINGAPORE AIRLINES

Mitie Group PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mitie Group PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Mitie Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

SINGAPORE AIRLINES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SINGAPORE AIRLINES are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, SINGAPORE AIRLINES may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mitie Group and SINGAPORE AIRLINES

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

The idea behind Mitie Group PLC and SINGAPORE AIRLINES 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.