Correlation Between Concurrent Technologies and AfriTin Mining
Can any of the company-specific risk be diversified away by investing in both Concurrent Technologies and AfriTin Mining 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 AfriTin Mining 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 AfriTin Mining, you can compare the effects of market volatilities on Concurrent Technologies and AfriTin Mining 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 AfriTin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concurrent Technologies and AfriTin Mining.
Diversification Opportunities for Concurrent Technologies and AfriTin Mining
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Concurrent and AfriTin is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Concurrent Technologies Plc and AfriTin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfriTin Mining 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 AfriTin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfriTin Mining has no effect on the direction of Concurrent Technologies i.e., Concurrent Technologies and AfriTin Mining go up and down completely randomly.
Pair Corralation between Concurrent Technologies and AfriTin Mining
Assuming the 90 days trading horizon Concurrent Technologies Plc is expected to generate 0.67 times more return on investment than AfriTin Mining. However, Concurrent Technologies Plc is 1.48 times less risky than AfriTin Mining. It trades about 0.09 of its potential returns per unit of risk. AfriTin Mining is currently generating about -0.04 per unit of risk. If you would invest 7,329 in Concurrent Technologies Plc on November 5, 2024 and sell it today you would earn a total of 10,971 from holding Concurrent Technologies Plc or generate 149.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Concurrent Technologies Plc vs. AfriTin Mining
Performance |
| Timeline |
| Concurrent Technologies |
| AfriTin Mining |
Concurrent Technologies and AfriTin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concurrent Technologies and AfriTin Mining
The main advantage of trading using opposite Concurrent Technologies and AfriTin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concurrent Technologies position performs unexpectedly, AfriTin Mining 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 AfriTin Mining will offset losses from the drop in AfriTin Mining's long position.The idea behind Concurrent Technologies Plc and AfriTin Mining 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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