Correlation Between Mitie Group and SemiLEDS

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

Diversification Opportunities for Mitie Group and SemiLEDS

0.56

Correlation Coefficient

Mitie Group  SemiLEDS

Very weak diversification

The 3 months correlation between Mitie and SemiLEDS is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mitie Group PLC and SemiLEDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SemiLEDS 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 SemiLEDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SemiLEDS has no effect on the direction of Mitie Group i.e., Mitie Group and SemiLEDS go up and down completely randomly.

Pair Corralation between Mitie Group and SemiLEDS

Assuming the 90 days horizon Mitie Group PLC is expected to generate 0.37 times more return on investment than SemiLEDS. However, Mitie Group PLC is 2.67 times less risky than SemiLEDS. It trades about 0.1 of its potential returns per unit of risk. SemiLEDS is currently generating about -0.05 per unit of risk. If you would invest  95,020  in Mitie Group PLC on April 25, 2025 and sell it today you would earn a total of  11,580  from holding Mitie Group PLC or generate 12.19% return on investment over 90 days.

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

Mitie Group PLC  vs.  SemiLEDS

Mitie Group PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mitie Group PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mitie Group reported solid returns over the last few months and may actually be approaching a breakup point.

SemiLEDS

Risk-Adjusted Performance

Very Weak

Over the last 90 days SemiLEDS 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 fundamental indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Mitie Group and SemiLEDS

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

The idea behind Mitie Group PLC and SemiLEDS 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.