Correlation Between Track and Mind Technology

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

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

Diversification Opportunities for Track and Mind Technology

-0.06

Correlation Coefficient

Track  Mind Technology

Good diversification

The 3 months correlation between Track and Mind is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Track Group and Mind Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Technology and Track 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 Track Group 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 Track i.e., Track and Mind Technology go up and down completely randomly.

Pair Corralation between Track and Mind Technology

Given the investment horizon of 90 days Track Group is expected to under-perform the Mind Technology. In addition to that, Track is 2.16 times more volatile than Mind Technology. It trades about 0.0 of its total potential returns per unit of risk. Mind Technology is currently generating about 0.14 per unit of volatility. If you would invest  392.00  in Mind Technology on September 13, 2024 and sell it today you would earn a total of  210.00  from holding Mind Technology or generate 53.57% return on investment over 90 days.

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

Track Group  vs.  Mind Technology

Track Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Track Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Track is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Mind Technology

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mind Technology are ranked lower than 11 (%) 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 Track and Mind Technology

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

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.