Correlation Between Bandwidth and Mitek Systems

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

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

Diversification Opportunities for Bandwidth and Mitek Systems

0.76

Correlation Coefficient

Bandwidth  Mitek Systems

Poor diversification

The 3 months correlation between Bandwidth and Mitek is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bandwidth and Mitek Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitek Systems and Bandwidth 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 Bandwidth are associated (or correlated) with Mitek Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitek Systems has no effect on the direction of Bandwidth i.e., Bandwidth and Mitek Systems go up and down completely randomly.

Pair Corralation between Bandwidth and Mitek Systems

Given the investment horizon of 90 days Bandwidth is expected to generate 1.22 times less return on investment than Mitek Systems. In addition to that, Bandwidth is 1.72 times more volatile than Mitek Systems. It trades about 0.05 of its total potential returns per unit of risk. Mitek Systems is currently generating about 0.1 per unit of volatility. If you would invest  828.00  in Mitek Systems on April 30, 2025 and sell it today you would earn a total of  100.00  from holding Mitek Systems or generate 12.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Bandwidth  vs.  Mitek Systems

Bandwidth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bandwidth are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Bandwidth may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Mitek Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mitek Systems are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Mitek Systems disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bandwidth and Mitek Systems

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

The idea behind Bandwidth and Mitek Systems 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.