Correlation Between MYnd Analytics and Indigo Books

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

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

Diversification Opportunities for MYnd Analytics and Indigo Books

-0.93

Correlation Coefficient

MYnd Analytics  Indigo Books

Pay attention - limited upside

The 3 months correlation between MYnd and Indigo is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding MYnd Analytics and Indigo Books Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indigo Books Music and MYnd Analytics 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 MYnd Analytics are associated (or correlated) with Indigo Books. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indigo Books Music has no effect on the direction of MYnd Analytics i.e., MYnd Analytics and Indigo Books go up and down completely randomly.

Pair Corralation between MYnd Analytics and Indigo Books

Given the investment horizon of 90 days MYnd Analytics is expected to generate 20.11 times more return on investment than Indigo Books. However, MYnd Analytics is 20.11 times more volatile than Indigo Books Music. It trades about 0.02 of its potential returns per unit of risk. Indigo Books Music is currently generating about 0.25 per unit of risk. If you would invest  253.00  in MYnd Analytics on March 16, 2024 and sell it today you would lose (1.00) from holding MYnd Analytics or give up 0.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	72.73%
Values	Daily Returns

MYnd Analytics  vs.  Indigo Books Music

MYnd Analytics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MYnd Analytics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Indigo Books Music

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Indigo Books Music has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak fundamental drivers, Indigo Books reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MYnd Analytics and Indigo Books

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

The idea behind MYnd Analytics and Indigo Books Music 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.