Correlation Between MIND CTI and Microsoft

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Can any of the company-specific risk be diversified away by investing in both MIND CTI and Microsoft 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 CTI and Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MIND CTI and Microsoft, you can compare the effects of market volatilities on MIND CTI and Microsoft 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 CTI with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIND CTI and Microsoft.

Diversification Opportunities for MIND CTI and Microsoft

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between MIND CTI and Microsoft is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding MIND CTI and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and MIND CTI 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 CTI are associated (or correlated) with Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of MIND CTI i.e., MIND CTI and Microsoft go up and down completely randomly.

Pair Corralation between MIND CTI and Microsoft

Given the investment horizon of 90 days MIND CTI is expected to generate 1.09 times more return on investment than Microsoft. However, MIND CTI is 1.09 times more volatile than Microsoft. It trades about 0.21 of its potential returns per unit of risk. Microsoft is currently generating about 0.08 per unit of risk. If you would invest  210.00  in MIND CTI on October 30, 2022 and sell it today you would earn a total of  19.00  from holding MIND CTI or generate 9.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

MIND CTI  vs.  Microsoft

 Performance (%) 
       Timeline  
MIND CTI 
MIND CTI Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in MIND CTI are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, MIND CTI may actually be approaching a critical reversion point that can send shares even higher in February 2023.

MIND CTI Price Channel

Microsoft 
Microsoft Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Microsoft may actually be approaching a critical reversion point that can send shares even higher in February 2023.

Microsoft Price Channel

MIND CTI and Microsoft Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MIND CTI and Microsoft

The main advantage of trading using opposite MIND CTI and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIND CTI position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.
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The idea behind MIND CTI and Microsoft 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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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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