Correlation Between Wag Group and Mitek Systems

Can any of the company-specific risk be diversified away by investing in both Wag Group and Mitek Systems 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 Wag Group and Mitek Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wag Group Co and Mitek Systems, you can compare the effects of market volatilities on Wag Group and Mitek Systems 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 Wag Group with a short position of Mitek Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wag Group and Mitek Systems.

Diversification Opportunities for Wag Group and Mitek Systems

-0.53

Correlation Coefficient

Wag Group  Mitek Systems

Excellent diversification

The 3 months correlation between Wag and Mitek is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Wag Group Co and Mitek Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitek Systems and Wag Group 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 Wag Group Co are associated (or correlated) with Mitek Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitek Systems has no effect on the direction of Wag Group i.e., Wag Group and Mitek Systems go up and down completely randomly.

Pair Corralation between Wag Group and Mitek Systems

Considering the 90-day investment horizon Wag Group Co is expected to under-perform the Mitek Systems. In addition to that, Wag Group is 3.94 times more volatile than Mitek Systems. It trades about -0.03 of its total potential returns per unit of risk. Mitek Systems is currently generating about 0.18 per unit of volatility. If you would invest  864.00  in Mitek Systems on October 6, 2024 and sell it today you would earn a total of  220.00  from holding Mitek Systems or generate 25.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Wag Group Co  vs.  Mitek Systems

Wag Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wag Group Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Mitek Systems

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mitek Systems are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Mitek Systems disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wag Group and Mitek Systems

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

The idea behind Wag Group Co and Mitek Systems 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.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.