Correlation Between NYSE Composite and Mind Technology
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Mind Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Mind Technology, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Mind Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Mind Technology.
Diversification Opportunities for NYSE Composite and Mind Technology
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Mind is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mind Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Technology and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Mind Technology go up and down completely randomly.
Pair Corralation between NYSE Composite and Mind Technology
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.62 times less return on investment than Mind Technology. But when comparing it to its historical volatility, NYSE Composite is 7.94 times less risky than Mind Technology. It trades about 0.09 of its potential returns per unit of risk. Mind Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 602.00 in Mind Technology on October 22, 2024 and sell it today you would earn a total of 145.00 from holding Mind Technology or generate 24.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
NYSE Composite vs. Mind Technology
Performance |
| Timeline |
NYSE Composite and Mind Technology Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Mind Technology
Pair trading matchups for Mind Technology
Pair Trading with NYSE Composite and Mind Technology
The main advantage of trading using opposite NYSE Composite and Mind Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Kenon Holdings | NYSE Composite vs. Procter Gamble | NYSE Composite vs. Broadcom | NYSE Composite vs. Nike Inc |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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