Correlation Between EPAM Systems and Gartner
Can any of the company-specific risk be diversified away by investing in both EPAM Systems and Gartner 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 Gartner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPAM Systems and Gartner, you can compare the effects of market volatilities on EPAM Systems and Gartner 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 Gartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPAM Systems and Gartner.
Diversification Opportunities for EPAM Systems and Gartner
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between EPAM and Gartner is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding EPAM Systems and Gartner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gartner 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 Gartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gartner has no effect on the direction of EPAM Systems i.e., EPAM Systems and Gartner go up and down completely randomly.
Pair Corralation between EPAM Systems and Gartner
Given the investment horizon of 90 days EPAM Systems is expected to generate 1.38 times less return on investment than Gartner. In addition to that, EPAM Systems is 1.91 times more volatile than Gartner. It trades about 0.25 of its total potential returns per unit of risk. Gartner is currently generating about 0.65 per unit of volatility. If you would invest 48,447 in Gartner on November 1, 2024 and sell it today you would earn a total of 5,352 from holding Gartner or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EPAM Systems vs. Gartner
Performance |
| Timeline |
| EPAM Systems |
| Gartner |
EPAM Systems and Gartner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPAM Systems and Gartner
The main advantage of trading using opposite EPAM Systems and Gartner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPAM Systems position performs unexpectedly, Gartner 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 Gartner will offset losses from the drop in Gartner's long position.| EPAM Systems vs. Concentrix | EPAM Systems vs. Gartner | EPAM Systems vs. Accenture plc | EPAM Systems vs. International Business Machines |
| Gartner vs. Science Applications International | Gartner vs. Leidos Holdings | Gartner vs. ExlService Holdings | Gartner vs. Parsons Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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