Correlation Between MIND CTI and Park City

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

By analyzing existing cross correlation between MIND CTI and Park City Group, you can compare the effects of market volatilities on MIND CTI and Park City 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 Park City. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIND CTI and Park City.

Diversification Opportunities for MIND CTI and Park City

0.08

Correlation Coefficient

MIND CTI  Park City

Significant diversification

The 3 months correlation between MIND and Park is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding MIND CTI and Park City Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park City Group 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 Park City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park City Group has no effect on the direction of MIND CTI i.e., MIND CTI and Park City go up and down completely randomly.

Pair Corralation between MIND CTI and Park City

Given the investment horizon of 90 days MIND CTI is expected to generate 18.98 times less return on investment than Park City. But when comparing it to its historical volatility, MIND CTI is 2.61 times less risky than Park City. It trades about 0.02 of its potential returns per unit of risk. Park City Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  904.00  in Park City Group on September 12, 2024 and sell it today you would earn a total of  106.00  from holding Park City Group or generate 11.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	6.7%
Values	Daily Returns

MIND CTI  vs.  Park City Group

MIND CTI

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MIND CTI are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, MIND CTI may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Park City Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Park City Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Park City is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MIND CTI and Park City

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

The idea behind MIND CTI and Park City Group 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.