Correlation Between Itron and Mind Technology

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

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

Diversification Opportunities for Itron and Mind Technology

-0.24

Correlation Coefficient

Itron  Mind Technology

Very good diversification

The 3 months correlation between Itron and Mind is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Itron Inc and Mind Technology Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Technology Pref and Itron 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 Itron Inc 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 Pref has no effect on the direction of Itron i.e., Itron and Mind Technology go up and down completely randomly.

Pair Corralation between Itron and Mind Technology

Given the investment horizon of 90 days Itron Inc is expected to generate 0.04 times more return on investment than Mind Technology. However, Itron Inc is 26.21 times less risky than Mind Technology. It trades about 0.17 of its potential returns per unit of risk. Mind Technology Pref is currently generating about -0.51 per unit of risk. If you would invest  9,777  in Itron Inc on September 2, 2024 and sell it today you would earn a total of  2,076  from holding Itron Inc or generate 21.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	6.25%
Values	Daily Returns

Itron Inc  vs.  Mind Technology Pref

Itron Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Itron Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Itron demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Mind Technology Pref

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mind Technology Pref has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Preferred Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Itron and Mind Technology

The main advantage of trading using opposite Itron and Mind Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itron 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 Itron Inc and Mind Technology Pref 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.