Correlation Between Concurrent Technologies and United Utilities
Can any of the company-specific risk be diversified away by investing in both Concurrent Technologies and United Utilities 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 United Utilities 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 United Utilities Group, you can compare the effects of market volatilities on Concurrent Technologies and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concurrent Technologies and United Utilities.
Diversification Opportunities for Concurrent Technologies and United Utilities
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Concurrent and United is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Concurrent Technologies Plc and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of Concurrent Technologies i.e., Concurrent Technologies and United Utilities go up and down completely randomly.
Pair Corralation between Concurrent Technologies and United Utilities
Assuming the 90 days trading horizon Concurrent Technologies Plc is expected to generate 2.68 times more return on investment than United Utilities. However, Concurrent Technologies is 2.68 times more volatile than United Utilities Group. It trades about 0.33 of its potential returns per unit of risk. United Utilities Group is currently generating about 0.25 per unit of risk. If you would invest 11,600 in Concurrent Technologies Plc on August 30, 2024 and sell it today you would earn a total of 3,550 from holding Concurrent Technologies Plc or generate 30.6% 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. United Utilities Group
Performance |
| Timeline |
| Concurrent Technologies |
| United Utilities |
Concurrent Technologies and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concurrent Technologies and United Utilities
The main advantage of trading using opposite Concurrent Technologies and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concurrent Technologies position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| Concurrent Technologies vs. GreenX Metals | Concurrent Technologies vs. Catena Media PLC | Concurrent Technologies vs. Cornish Metals | Concurrent Technologies vs. Atresmedia |
| United Utilities vs. Greenroc Mining PLC | United Utilities vs. Lundin Mining Corp | United Utilities vs. Thor Mining PLC | United Utilities vs. Silvercorp Metals |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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