Correlation Between EPAM Systems and Concentrix
Can any of the company-specific risk be diversified away by investing in both EPAM Systems and Concentrix 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 EPAM Systems and Concentrix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPAM Systems and Concentrix, you can compare the effects of market volatilities on EPAM Systems and Concentrix 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 EPAM Systems with a short position of Concentrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPAM Systems and Concentrix.
Diversification Opportunities for EPAM Systems and Concentrix
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EPAM and Concentrix is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding EPAM Systems and Concentrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concentrix and EPAM Systems 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 EPAM Systems are associated (or correlated) with Concentrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concentrix has no effect on the direction of EPAM Systems i.e., EPAM Systems and Concentrix go up and down completely randomly.
Pair Corralation between EPAM Systems and Concentrix
Given the investment horizon of 90 days EPAM Systems is expected to generate 1.42 times more return on investment than Concentrix. However, EPAM Systems is 1.42 times more volatile than Concentrix. It trades about 0.29 of its potential returns per unit of risk. Concentrix is currently generating about -0.18 per unit of risk. If you would invest 19,316 in EPAM Systems on August 24, 2024 and sell it today you would earn a total of 5,118 from holding EPAM Systems or generate 26.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EPAM Systems vs. Concentrix
Performance |
| Timeline |
| EPAM Systems |
| Concentrix |
EPAM Systems and Concentrix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPAM Systems and Concentrix
The main advantage of trading using opposite EPAM Systems and Concentrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPAM Systems position performs unexpectedly, Concentrix 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 Concentrix will offset losses from the drop in Concentrix's long position.| EPAM Systems vs. Concentrix | EPAM Systems vs. Accenture plc | EPAM Systems vs. International Business Machines | EPAM Systems vs. Cognizant Technology Solutions |
| Concentrix vs. Genpact Limited | Concentrix vs. ExlService Holdings | Concentrix vs. Science Applications International | Concentrix vs. CLARIVATE PLC |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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