Correlation Between Mind Technology and Luna Innovations
Can any of the company-specific risk be diversified away by investing in both Mind Technology and Luna Innovations 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 Luna Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mind Technology Pref and Luna Innovations Incorporated, you can compare the effects of market volatilities on Mind Technology and Luna Innovations 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 Luna Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mind Technology and Luna Innovations.
Diversification Opportunities for Mind Technology and Luna Innovations
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mind and Luna is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mind Technology Pref and Luna Innovations Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luna Innovations 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 Pref are associated (or correlated) with Luna Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luna Innovations has no effect on the direction of Mind Technology i.e., Mind Technology and Luna Innovations go up and down completely randomly.
Pair Corralation between Mind Technology and Luna Innovations
Assuming the 90 days horizon Mind Technology Pref is expected to generate 1.41 times more return on investment than Luna Innovations. However, Mind Technology is 1.41 times more volatile than Luna Innovations Incorporated. It trades about 0.01 of its potential returns per unit of risk. Luna Innovations Incorporated is currently generating about -0.05 per unit of risk. If you would invest 664.00 in Mind Technology Pref on August 31, 2024 and sell it today you would lose (664.00) from holding Mind Technology Pref or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 87.24% |
| Values | Daily Returns |
Mind Technology Pref vs. Luna Innovations Incorporated
Performance |
| Timeline |
| Mind Technology Pref |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Luna Innovations |
Mind Technology and Luna Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mind Technology and Luna Innovations
The main advantage of trading using opposite Mind Technology and Luna Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mind Technology position performs unexpectedly, Luna Innovations 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 Luna Innovations will offset losses from the drop in Luna Innovations' long position.| Mind Technology vs. Kraken Robotics | Mind Technology vs. SaverOne 2014 Ltd | Mind Technology vs. Focus Universal | Mind Technology vs. Nanalysis Scientific Corp |
| Luna Innovations vs. ESCO Technologies | Luna Innovations vs. Know Labs | Luna Innovations vs. Focus Universal | Luna Innovations vs. Sono Tek Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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