Correlation Between Mitek Systems and Alight
Can any of the company-specific risk be diversified away by investing in both Mitek Systems and Alight 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 Mitek Systems and Alight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitek Systems and Alight Inc, you can compare the effects of market volatilities on Mitek Systems and Alight 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 Mitek Systems with a short position of Alight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitek Systems and Alight.
Diversification Opportunities for Mitek Systems and Alight
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitek and Alight is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mitek Systems and Alight Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alight Inc and Mitek Systems 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 Mitek Systems are associated (or correlated) with Alight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alight Inc has no effect on the direction of Mitek Systems i.e., Mitek Systems and Alight go up and down completely randomly.
Pair Corralation between Mitek Systems and Alight
Given the investment horizon of 90 days Mitek Systems is expected to under-perform the Alight. In addition to that, Mitek Systems is 2.16 times more volatile than Alight Inc. It trades about -0.07 of its total potential returns per unit of risk. Alight Inc is currently generating about -0.01 per unit of volatility. If you would invest 761.00 in Alight Inc on June 21, 2024 and sell it today you would lose (14.00) from holding Alight Inc or give up 1.84% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mitek Systems vs. Alight Inc
Performance |
Timeline |
Mitek Systems |
Alight Inc |
Mitek Systems and Alight Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mitek Systems and Alight
The main advantage of trading using opposite Mitek Systems and Alight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitek Systems position performs unexpectedly, Alight 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 Alight will offset losses from the drop in Alight's long position.Mitek Systems vs. C3 Ai Inc | Mitek Systems vs. Shopify | Mitek Systems vs. Snowflake | Mitek Systems vs. ServiceNow |
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 Stocks Directory module to find actively traded stocks across global markets.
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