Correlation Between Shimadzu and Mind Technology

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

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

Diversification Opportunities for Shimadzu and Mind Technology

0.07

Correlation Coefficient

Shimadzu  Mind Technology

Significant diversification

The 3 months correlation between Shimadzu and Mind is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Shimadzu and Mind Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Technology and Shimadzu 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 Shimadzu 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 Shimadzu i.e., Shimadzu and Mind Technology go up and down completely randomly.

Pair Corralation between Shimadzu and Mind Technology

Assuming the 90 days horizon Shimadzu is expected to generate 99.12 times less return on investment than Mind Technology. But when comparing it to its historical volatility, Shimadzu is 68.02 times less risky than Mind Technology. It trades about 0.12 of its potential returns per unit of risk. Mind Technology is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  405.00  in Mind Technology on September 22, 2024 and sell it today you would earn a total of  355.00  from holding Mind Technology or generate 87.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Shimadzu  vs.  Mind Technology

Shimadzu

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shimadzu are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Shimadzu is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Mind Technology

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mind Technology are ranked lower than 14 (%) 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.

Pair Trading with Shimadzu and Mind Technology

The main advantage of trading using opposite Shimadzu and Mind Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimadzu 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.

The idea behind Shimadzu and Mind Technology 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.