Correlation Between Cepton and Mind Technology
Can any of the company-specific risk be diversified away by investing in both Cepton and Mind Technology 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 Cepton and Mind Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cepton Inc and Mind Technology, you can compare the effects of market volatilities on Cepton and Mind Technology 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 Cepton with a short position of Mind Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cepton and Mind Technology.
Diversification Opportunities for Cepton and Mind Technology
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cepton and Mind is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc and Mind Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Technology and Cepton 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 Cepton Inc are associated (or correlated) with Mind Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mind Technology has no effect on the direction of Cepton i.e., Cepton and Mind Technology go up and down completely randomly.
Pair Corralation between Cepton and Mind Technology
Assuming the 90 days horizon Cepton Inc is expected to generate 2.22 times more return on investment than Mind Technology. However, Cepton is 2.22 times more volatile than Mind Technology. It trades about 0.05 of its potential returns per unit of risk. Mind Technology is currently generating about -0.04 per unit of risk. If you would invest 2.86 in Cepton Inc on August 25, 2024 and sell it today you would lose (1.86) from holding Cepton Inc or give up 65.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.24% |
| Values | Daily Returns |
Cepton Inc vs. Mind Technology
Performance |
| Timeline |
| Cepton Inc |
| Mind Technology |
Cepton and Mind Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cepton and Mind Technology
The main advantage of trading using opposite Cepton and Mind Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cepton position performs unexpectedly, Mind Technology 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 Mind Technology will offset losses from the drop in Mind Technology's long position.The idea behind Cepton Inc and Mind Technology 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.| Mind Technology vs. Spectris plc | Mind Technology vs. Electro Sensors | Mind Technology vs. Sono Tek Corp | Mind Technology vs. Vishay Precision Group |
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 the Commodity Directory module to find actively traded commodities issued by global exchanges.
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