Correlation Between Bonso Electronics and Mind Technology

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

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

Diversification Opportunities for Bonso Electronics and Mind Technology

0.41

Correlation Coefficient

Bonso Electronics  Mind Technology

Very weak diversification

The 3 months correlation between Bonso and Mind is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bonso Electronics Internationa and Mind Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Technology and Bonso Electronics 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 Bonso Electronics International 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 has no effect on the direction of Bonso Electronics i.e., Bonso Electronics and Mind Technology go up and down completely randomly.

Pair Corralation between Bonso Electronics and Mind Technology

If you would invest  259.00  in Bonso Electronics International on July 25, 2024 and sell it today you would earn a total of  0.00  from holding Bonso Electronics International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	2.44%
Values	Daily Returns

Bonso Electronics Internationa  vs.  Mind Technology

Bonso Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bonso Electronics International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bonso Electronics is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

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 November 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Bonso Electronics and Mind Technology

The main advantage of trading using opposite Bonso Electronics and Mind Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonso Electronics 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 Bonso Electronics International and Mind Technology 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.