Correlation Between Concentrix and Formula Systems
Can any of the company-specific risk be diversified away by investing in both Concentrix and Formula Systems 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 Concentrix and Formula Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concentrix and Formula Systems 1985, you can compare the effects of market volatilities on Concentrix and Formula Systems 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 Concentrix with a short position of Formula Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concentrix and Formula Systems.
Diversification Opportunities for Concentrix and Formula Systems
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Concentrix and Formula is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Concentrix and Formula Systems 1985 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formula Systems 1985 and Concentrix 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 Concentrix are associated (or correlated) with Formula Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formula Systems 1985 has no effect on the direction of Concentrix i.e., Concentrix and Formula Systems go up and down completely randomly.
Pair Corralation between Concentrix and Formula Systems
Given the investment horizon of 90 days Concentrix is expected to generate 1.31 times more return on investment than Formula Systems. However, Concentrix is 1.31 times more volatile than Formula Systems 1985. It trades about 0.03 of its potential returns per unit of risk. Formula Systems 1985 is currently generating about -0.06 per unit of risk. If you would invest 4,449 in Concentrix on August 28, 2024 and sell it today you would earn a total of 28.00 from holding Concentrix or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concentrix vs. Formula Systems 1985
Performance |
| Timeline |
| Concentrix |
| Formula Systems 1985 |
Concentrix and Formula Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concentrix and Formula Systems
The main advantage of trading using opposite Concentrix and Formula Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concentrix position performs unexpectedly, Formula Systems 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 Formula Systems will offset losses from the drop in Formula Systems' long position.| Concentrix vs. Oneconnect Financial Technology | Concentrix vs. Global Business Travel | Concentrix vs. Alight Inc | Concentrix vs. CS Disco LLC |
| Formula Systems vs. CSP Inc | Formula Systems vs. Nayax | Formula Systems vs. Information Services Group | Formula Systems vs. The Hackett Group |
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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