Correlation Between Mitek Systems and Power Integrations

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

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

Diversification Opportunities for Mitek Systems and Power Integrations

0.83

Correlation Coefficient

Mitek Systems  Power Integrations

Very poor diversification

The 3 months correlation between Mitek and Power is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Mitek Systems and Power Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Integrations 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 Power Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Integrations has no effect on the direction of Mitek Systems i.e., Mitek Systems and Power Integrations go up and down completely randomly.

Pair Corralation between Mitek Systems and Power Integrations

Given the investment horizon of 90 days Mitek Systems is expected to generate 0.81 times more return on investment than Power Integrations. However, Mitek Systems is 1.23 times less risky than Power Integrations. It trades about 0.1 of its potential returns per unit of risk. Power Integrations is currently generating about 0.05 per unit of risk. If you would invest  832.00  in Mitek Systems on April 25, 2025 and sell it today you would earn a total of  108.00  from holding Mitek Systems or generate 12.98% return on investment over 90 days.

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

Mitek Systems  vs.  Power Integrations

Mitek Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mitek Systems are ranked lower than 8 (%) 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.

Power Integrations

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Power Integrations are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Power Integrations may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Mitek Systems and Power Integrations

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

The idea behind Mitek Systems and Power Integrations 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.