Correlation Between Mind Technology and Signal Advance

Can any of the company-specific risk be diversified away by investing in both Mind Technology and Signal Advance 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 Signal Advance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mind Technology and Signal Advance, you can compare the effects of market volatilities on Mind Technology and Signal Advance 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 Signal Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mind Technology and Signal Advance.

Diversification Opportunities for Mind Technology and Signal Advance

0.1

Correlation Coefficient

Mind Technology  Signal Advance

Average diversification

The 3 months correlation between Mind and Signal is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mind Technology and Signal Advance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signal Advance 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 Signal Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signal Advance has no effect on the direction of Mind Technology i.e., Mind Technology and Signal Advance go up and down completely randomly.

Pair Corralation between Mind Technology and Signal Advance

Given the investment horizon of 90 days Mind Technology is expected to generate 15.81 times less return on investment than Signal Advance. But when comparing it to its historical volatility, Mind Technology is 2.17 times less risky than Signal Advance. It trades about 0.01 of its potential returns per unit of risk. Signal Advance is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Signal Advance on September 18, 2024 and sell it today you would lose (3.25) from holding Signal Advance or give up 29.55% of portfolio value over 90 days.

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

Mind Technology  vs.  Signal Advance

Mind Technology

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mind Technology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Mind Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Signal Advance

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Signal Advance are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Signal Advance disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mind Technology and Signal Advance

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

The idea behind Mind Technology and Signal Advance 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.