Correlation Between Concurrent Technologies and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Concurrent Technologies and Gaztransport 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 Gaztransport 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 Gaztransport et Technigaz, you can compare the effects of market volatilities on Concurrent Technologies and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concurrent Technologies and Gaztransport.
Diversification Opportunities for Concurrent Technologies and Gaztransport
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Concurrent and Gaztransport is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Concurrent Technologies Plc and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Concurrent Technologies i.e., Concurrent Technologies and Gaztransport go up and down completely randomly.
Pair Corralation between Concurrent Technologies and Gaztransport
Assuming the 90 days trading horizon Concurrent Technologies Plc is expected to generate 1.57 times more return on investment than Gaztransport. However, Concurrent Technologies is 1.57 times more volatile than Gaztransport et Technigaz. It trades about 0.12 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.04 per unit of risk. If you would invest 10,102 in Concurrent Technologies Plc on September 1, 2024 and sell it today you would earn a total of 4,298 from holding Concurrent Technologies Plc or generate 42.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concurrent Technologies Plc vs. Gaztransport et Technigaz
Performance |
| Timeline |
| Concurrent Technologies |
| Gaztransport et Technigaz |
Concurrent Technologies and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concurrent Technologies and Gaztransport
The main advantage of trading using opposite Concurrent Technologies and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concurrent Technologies position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.The idea behind Concurrent Technologies Plc and Gaztransport et Technigaz 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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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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