Correlation Between Gamma Communications and Concurrent Technologies
Can any of the company-specific risk be diversified away by investing in both Gamma Communications and Concurrent Technologies 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 Gamma Communications and Concurrent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications PLC and Concurrent Technologies Plc, you can compare the effects of market volatilities on Gamma Communications and Concurrent Technologies 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 Gamma Communications with a short position of Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Concurrent Technologies.
Diversification Opportunities for Gamma Communications and Concurrent Technologies
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gamma and Concurrent is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications PLC and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies and Gamma Communications 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 Gamma Communications PLC are associated (or correlated) with Concurrent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concurrent Technologies has no effect on the direction of Gamma Communications i.e., Gamma Communications and Concurrent Technologies go up and down completely randomly.
Pair Corralation between Gamma Communications and Concurrent Technologies
Assuming the 90 days trading horizon Gamma Communications is expected to generate 2.83 times less return on investment than Concurrent Technologies. But when comparing it to its historical volatility, Gamma Communications PLC is 1.55 times less risky than Concurrent Technologies. It trades about 0.04 of its potential returns per unit of risk. Concurrent Technologies Plc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,577 in Concurrent Technologies Plc on October 14, 2024 and sell it today you would earn a total of 6,323 from holding Concurrent Technologies Plc or generate 83.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Gamma Communications PLC vs. Concurrent Technologies Plc
Performance |
| Timeline |
| Gamma Communications PLC |
| Concurrent Technologies |
Gamma Communications and Concurrent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Concurrent Technologies
The main advantage of trading using opposite Gamma Communications and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications position performs unexpectedly, Concurrent Technologies 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 Concurrent Technologies will offset losses from the drop in Concurrent Technologies' long position.| Gamma Communications vs. Molson Coors Beverage | Gamma Communications vs. Vitec Software Group | Gamma Communications vs. mobilezone holding AG | Gamma Communications vs. Fonix Mobile plc |
| Concurrent Technologies vs. Gamma Communications PLC | Concurrent Technologies vs. CAP LEASE AVIATION | Concurrent Technologies vs. Verizon Communications | Concurrent Technologies vs. Delta Air Lines |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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