Correlation Between Concurrent Technologies and X FAB
Can any of the company-specific risk be diversified away by investing in both Concurrent Technologies and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on Concurrent Technologies and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concurrent Technologies and X FAB.
Diversification Opportunities for Concurrent Technologies and X FAB
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Concurrent and 0ROZ is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Concurrent Technologies Plc and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Concurrent Technologies i.e., Concurrent Technologies and X FAB go up and down completely randomly.
Pair Corralation between Concurrent Technologies and X FAB
Assuming the 90 days trading horizon Concurrent Technologies Plc is expected to generate 1.25 times more return on investment than X FAB. However, Concurrent Technologies is 1.25 times more volatile than X FAB Silicon Foundries. It trades about 0.21 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.14 per unit of risk. If you would invest 11,350 in Concurrent Technologies Plc on August 30, 2024 and sell it today you would earn a total of 3,800 from holding Concurrent Technologies Plc or generate 33.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concurrent Technologies Plc vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Concurrent Technologies |
| X FAB Silicon |
Concurrent Technologies and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concurrent Technologies and X FAB
The main advantage of trading using opposite Concurrent Technologies and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concurrent Technologies position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Concurrent Technologies vs. GreenX Metals | Concurrent Technologies vs. Catena Media PLC | Concurrent Technologies vs. Cornish Metals | Concurrent Technologies vs. Atresmedia |
| X FAB vs. Lendinvest PLC | X FAB vs. Neometals | X FAB vs. Albion Technology General | X FAB vs. Jupiter Fund Management |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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