Correlation Between Mitek Systems and Network 1

Can any of the company-specific risk be diversified away by investing in both Mitek Systems and Network 1 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 Network 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mitek Systems and Network 1 Technologies, you can compare the effects of market volatilities on Mitek Systems and Network 1 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 Network 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitek Systems and Network 1.

Diversification Opportunities for Mitek Systems and Network 1

-0.62

Correlation Coefficient

Mitek Systems  Network 1

Excellent diversification

The 3 months correlation between Mitek and Network is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mitek Systems and Network 1 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network 1 Technologies 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 Network 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network 1 Technologies has no effect on the direction of Mitek Systems i.e., Mitek Systems and Network 1 go up and down completely randomly.

Pair Corralation between Mitek Systems and Network 1

Given the investment horizon of 90 days Mitek Systems is expected to generate 4.03 times less return on investment than Network 1. But when comparing it to its historical volatility, Mitek Systems is 1.11 times less risky than Network 1. It trades about 0.03 of its potential returns per unit of risk. Network 1 Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  124.00  in Network 1 Technologies on May 8, 2025 and sell it today you would earn a total of  18.00  from holding Network 1 Technologies or generate 14.52% return on investment over 90 days.

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

Mitek Systems  vs.  Network 1 Technologies

Mitek Systems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mitek Systems are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Mitek Systems is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Network 1 Technologies

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Network 1 Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Network 1 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mitek Systems and Network 1

The main advantage of trading using opposite Mitek Systems and Network 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitek Systems position performs unexpectedly, Network 1 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 Network 1 will offset losses from the drop in Network 1's long position.

The idea behind Mitek Systems and Network 1 Technologies 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.