Correlation Between Concurrent Technologies and American Homes
Can any of the company-specific risk be diversified away by investing in both Concurrent Technologies and American Homes 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 Concurrent Technologies and American Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concurrent Technologies Plc and American Homes 4, you can compare the effects of market volatilities on Concurrent Technologies and American Homes 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 Concurrent Technologies with a short position of American Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concurrent Technologies and American Homes.
Diversification Opportunities for Concurrent Technologies and American Homes
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Concurrent and American is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Concurrent Technologies Plc and American Homes 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Homes 4 and Concurrent Technologies 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 Concurrent Technologies Plc are associated (or correlated) with American Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Homes 4 has no effect on the direction of Concurrent Technologies i.e., Concurrent Technologies and American Homes go up and down completely randomly.
Pair Corralation between Concurrent Technologies and American Homes
Assuming the 90 days trading horizon Concurrent Technologies Plc is expected to under-perform the American Homes. In addition to that, Concurrent Technologies is 1.85 times more volatile than American Homes 4. It trades about -0.21 of its total potential returns per unit of risk. American Homes 4 is currently generating about -0.04 per unit of volatility. If you would invest 3,537 in American Homes 4 on November 29, 2024 and sell it today you would lose (38.00) from holding American Homes 4 or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Concurrent Technologies Plc vs. American Homes 4
Performance |
| Timeline |
| Concurrent Technologies |
| American Homes 4 |
Concurrent Technologies and American Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concurrent Technologies and American Homes
The main advantage of trading using opposite Concurrent Technologies and American Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concurrent Technologies position performs unexpectedly, American Homes 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 American Homes will offset losses from the drop in American Homes' long position.| Concurrent Technologies vs. Broadcom | Concurrent Technologies vs. Fevertree Drinks Plc | Concurrent Technologies vs. Kaufman Et Broad | Concurrent Technologies vs. Grieg Seafood |
| American Homes vs. Fevertree Drinks Plc | American Homes vs. Martin Marietta Materials | American Homes vs. Tatton Asset Management | American Homes vs. Vulcan Materials Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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