Correlation Between IDEXX Laboratories and Mitie Group

Can any of the company-specific risk be diversified away by investing in both IDEXX Laboratories 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 IDEXX Laboratories and Mitie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IDEXX Laboratories and Mitie Group PLC, you can compare the effects of market volatilities on IDEXX Laboratories 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 IDEXX Laboratories with a short position of Mitie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDEXX Laboratories and Mitie Group.

Diversification Opportunities for IDEXX Laboratories and Mitie Group

0.71

Correlation Coefficient

IDEXX Laboratories  Mitie Group

Poor diversification

The 3 months correlation between IDEXX and Mitie is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding IDEXX Laboratories 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 IDEXX Laboratories 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 IDEXX Laboratories 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 IDEXX Laboratories i.e., IDEXX Laboratories and Mitie Group go up and down completely randomly.

Pair Corralation between IDEXX Laboratories and Mitie Group

Assuming the 90 days horizon IDEXX Laboratories is expected to under-perform the Mitie Group. But the stock apears to be less risky and, when comparing its historical volatility, IDEXX Laboratories is 1.41 times less risky than Mitie Group. The stock trades about -0.1 of its potential returns per unit of risk. The Mitie Group PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  99,660  in Mitie Group PLC on April 22, 2025 and sell it today you would earn a total of  3,940  from holding Mitie Group PLC or generate 3.95% return on investment over 90 days.

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

IDEXX Laboratories  vs.  Mitie Group PLC

IDEXX Laboratories

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IDEXX Laboratories are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, IDEXX Laboratories reported solid returns over the last few months and may actually be approaching a breakup point.

Mitie Group PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mitie Group PLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Mitie Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IDEXX Laboratories and Mitie Group

The main advantage of trading using opposite IDEXX Laboratories and Mitie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDEXX Laboratories 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.

The idea behind IDEXX Laboratories and Mitie Group PLC 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.