Correlation Between MITIE GROUP and AMP

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

Diversification Opportunities for MITIE GROUP and AMP

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between MITIE and AMP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MITIE GROUP PLC ORD 2 5P and AMP LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP LIMITED 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 AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP LIMITED has no effect on the direction of MITIE GROUP i.e., MITIE GROUP and AMP go up and down completely randomly.

Pair Corralation between MITIE GROUP and AMP

If you would invest  5,960  in MITIE GROUP PLC on May 11, 2022 and sell it today you would earn a total of  1,780  from holding MITIE GROUP PLC or generate 29.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

MITIE GROUP PLC ORD 2 5P  vs.  AMP LIMITED

 Performance (%) 
       Timeline  
MITIE GROUP PLC 
MITIE Performance
24 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in MITIE GROUP PLC are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, MITIE GROUP revealed solid returns over the last few months and may actually be approaching a breakup point.

MITIE Price Channel

AMP LIMITED 
AMP Performance
0 of 100
Over the last 90 days AMP LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, AMP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

MITIE GROUP and AMP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MITIE GROUP and AMP

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

MITIE GROUP PLC

Pair trading matchups for MITIE GROUP

Blink Charging vs. MITIE GROUP
Agnico-Eagle Mines vs. MITIE GROUP
Salesforce vs. MITIE GROUP
Tencent Holdings vs. MITIE GROUP
Ubiquiti Networks vs. MITIE GROUP
Amazon vs. MITIE GROUP
Enbridge vs. MITIE GROUP
Ultralife Corp vs. MITIE GROUP
Exxon vs. MITIE GROUP
Fidelity Select vs. MITIE GROUP
Otp Bank vs. MITIE GROUP
Coca Cola vs. MITIE GROUP
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against MITIE GROUP as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. MITIE GROUP's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, MITIE GROUP's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to MITIE GROUP PLC.
The idea behind MITIE GROUP PLC and AMP LIMITED 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.

AMP LIMITED

Pair trading matchups for AMP

Coca Cola vs. AMP
Salesforce vs. AMP
Blink Charging vs. AMP
Canadian National vs. AMP
Fidelity Select vs. AMP
Amazon vs. AMP
Shopify vs. AMP
Enbridge vs. AMP
Agnico-Eagle Mines vs. AMP
Alphabet vs. AMP
Tesla vs. AMP
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against AMP as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. AMP's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, AMP's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to AMP LIMITED.
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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