Correlation Between Mind Technology and Cepton
Can any of the company-specific risk be diversified away by investing in both Mind Technology and Cepton 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 Mind Technology and Cepton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mind Technology and Cepton Inc, you can compare the effects of market volatilities on Mind Technology and Cepton 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 Mind Technology with a short position of Cepton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mind Technology and Cepton.
Diversification Opportunities for Mind Technology and Cepton
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mind and Cepton is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mind Technology and Cepton Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cepton Inc and Mind Technology 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 Mind Technology are associated (or correlated) with Cepton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cepton Inc has no effect on the direction of Mind Technology i.e., Mind Technology and Cepton go up and down completely randomly.
Pair Corralation between Mind Technology and Cepton
Given the investment horizon of 90 days Mind Technology is expected to under-perform the Cepton. But the stock apears to be less risky and, when comparing its historical volatility, Mind Technology is 2.22 times less risky than Cepton. The stock trades about -0.04 of its potential returns per unit of risk. The Cepton Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. 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 |
Mind Technology vs. Cepton Inc
Performance |
| Timeline |
| Mind Technology |
| Cepton Inc |
Mind Technology and Cepton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mind Technology and Cepton
The main advantage of trading using opposite Mind Technology and Cepton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mind Technology position performs unexpectedly, Cepton 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 Cepton will offset losses from the drop in Cepton's long position.| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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