Correlation Between Mind Technology and Deep Down

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

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

Diversification Opportunities for Mind Technology and Deep Down

0.57

Correlation Coefficient

Mind Technology  Deep Down

Very weak diversification

The 3 months correlation between Mind and Deep is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mind Technology and Deep Down in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deep Down 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 Deep Down. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deep Down has no effect on the direction of Mind Technology i.e., Mind Technology and Deep Down go up and down completely randomly.

Pair Corralation between Mind Technology and Deep Down

If you would invest  58.00  in Deep Down on January 20, 2024 and sell it today you would earn a total of  0.00  from holding Deep Down or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Mind Technology  vs.  Deep Down

Mind Technology

Risk-Adjusted Performance

0 of 100

Very Weak

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

Deep Down

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deep Down has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Deep Down is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Mind Technology and Deep Down

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

The idea behind Mind Technology and Deep Down 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.