Correlation Between AcadeMedia and Concurrent Technologies

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Can any of the company-specific risk be diversified away by investing in both AcadeMedia and Concurrent Technologies 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 AcadeMedia and Concurrent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Concurrent Technologies Plc, you can compare the effects of market volatilities on AcadeMedia and Concurrent Technologies 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 AcadeMedia with a short position of Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Concurrent Technologies.

Diversification Opportunities for AcadeMedia and Concurrent Technologies

-0.73
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between AcadeMedia and Concurrent is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with Concurrent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concurrent Technologies has no effect on the direction of AcadeMedia i.e., AcadeMedia and Concurrent Technologies go up and down completely randomly.

Pair Corralation between AcadeMedia and Concurrent Technologies

Assuming the 90 days trading horizon AcadeMedia AB is expected to generate 0.68 times more return on investment than Concurrent Technologies. However, AcadeMedia AB is 1.47 times less risky than Concurrent Technologies. It trades about 0.22 of its potential returns per unit of risk. Concurrent Technologies Plc is currently generating about -0.18 per unit of risk. If you would invest  6,154  in AcadeMedia AB on September 14, 2024 and sell it today you would earn a total of  416.00  from holding AcadeMedia AB or generate 6.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

AcadeMedia AB  vs.  Concurrent Technologies Plc

 Performance 
       Timeline  
AcadeMedia AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AcadeMedia AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AcadeMedia is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Concurrent Technologies 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Concurrent Technologies Plc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Concurrent Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

AcadeMedia and Concurrent Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AcadeMedia and Concurrent Technologies

The main advantage of trading using opposite AcadeMedia and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, Concurrent Technologies 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 Concurrent Technologies will offset losses from the drop in Concurrent Technologies' long position.
The idea behind AcadeMedia AB and Concurrent Technologies Plc 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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