Correlation Between Pentair PLC and Concurrent Technologies
Can any of the company-specific risk be diversified away by investing in both Pentair PLC 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 Pentair PLC and Concurrent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pentair PLC and Concurrent Technologies Plc, you can compare the effects of market volatilities on Pentair PLC 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 Pentair PLC with a short position of Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pentair PLC and Concurrent Technologies.
Diversification Opportunities for Pentair PLC and Concurrent Technologies
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pentair and Concurrent is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Pentair PLC and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies and Pentair PLC 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 Pentair PLC 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 Pentair PLC i.e., Pentair PLC and Concurrent Technologies go up and down completely randomly.
Pair Corralation between Pentair PLC and Concurrent Technologies
Assuming the 90 days trading horizon Pentair PLC is expected to generate 10.91 times less return on investment than Concurrent Technologies. But when comparing it to its historical volatility, Pentair PLC is 2.83 times less risky than Concurrent Technologies. It trades about 0.12 of its potential returns per unit of risk. Concurrent Technologies Plc is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 13,250 in Concurrent Technologies Plc on October 23, 2024 and sell it today you would earn a total of 3,875 from holding Concurrent Technologies Plc or generate 29.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Pentair PLC vs. Concurrent Technologies Plc
Performance |
| Timeline |
| Pentair PLC |
| Concurrent Technologies |
Pentair PLC and Concurrent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pentair PLC and Concurrent Technologies
The main advantage of trading using opposite Pentair PLC and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pentair PLC 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.| Pentair PLC vs. Axfood AB | Pentair PLC vs. Hilton Food Group | Pentair PLC vs. Ebro Foods | Pentair PLC vs. Grieg Seafood |
| Concurrent Technologies vs. CleanTech Lithium plc | Concurrent Technologies vs. Pentair PLC | Concurrent Technologies vs. Finnair Oyj | Concurrent Technologies vs. Universal Display Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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