Correlation Between MITIE GROUP and Horizon Bancorp

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

Diversification Opportunities for MITIE GROUP and Horizon Bancorp

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between MITIE GROUP and Horizon Bancorp

If you would invest  3,393  in MITIE GROUP PLC on May 17, 2022 and sell it today you would earn a total of  4,457  from holding MITIE GROUP PLC or generate 131.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

MITIE GROUP PLC ORD 2 5P  vs.  Horizon Bancorp Inc

 Performance (%) 
       Timeline  
MITIE GROUP PLC 
MITIE Performance
22 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in MITIE GROUP PLC are ranked lower than 22 (%) 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

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

MITIE GROUP and Horizon Bancorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MITIE GROUP and Horizon Bancorp

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

MITIE GROUP PLC

Pair trading matchups for MITIE GROUP

Wex vs. MITIE GROUP
United Rentals vs. MITIE GROUP
Visa vs. MITIE GROUP
Walker Dunlop vs. MITIE GROUP
Tenneco Automotive vs. MITIE GROUP
Qualcomm vs. MITIE GROUP
Oracle vs. MITIE GROUP
Vmware vs. MITIE GROUP
Dupont Denemours vs. MITIE GROUP
Equinix 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 Horizon Bancorp 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.

Horizon Bancorp

Pair trading matchups for Horizon Bancorp

Salesforce vs. Horizon Bancorp
Tenneco Automotive vs. Horizon Bancorp
Equinix vs. Horizon Bancorp
Amazon vs. Horizon Bancorp
Walker Dunlop vs. Horizon Bancorp
United Rentals vs. Horizon Bancorp
Sentinelone Inc vs. Horizon Bancorp
Visa vs. Horizon Bancorp
Oracle vs. Horizon Bancorp
Ford vs. Horizon Bancorp
Boeing vs. Horizon Bancorp
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 Horizon Bancorp 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. Horizon Bancorp'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, Horizon Bancorp'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 Horizon Bancorp.
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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