Correlation Between Impax Environmental and Concurrent Technologies
Can any of the company-specific risk be diversified away by investing in both Impax Environmental 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 Impax Environmental and Concurrent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and Concurrent Technologies Plc, you can compare the effects of market volatilities on Impax Environmental 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 Impax Environmental with a short position of Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Concurrent Technologies.
Diversification Opportunities for Impax Environmental and Concurrent Technologies
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Impax and Concurrent is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies and Impax Environmental 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 Impax Environmental Markets 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 Impax Environmental i.e., Impax Environmental and Concurrent Technologies go up and down completely randomly.
Pair Corralation between Impax Environmental and Concurrent Technologies
Assuming the 90 days trading horizon Impax Environmental is expected to generate 6.8 times less return on investment than Concurrent Technologies. But when comparing it to its historical volatility, Impax Environmental Markets is 3.25 times less risky than Concurrent Technologies. It trades about 0.22 of its potential returns per unit of risk. Concurrent Technologies Plc is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 13,750 in Concurrent Technologies Plc on November 3, 2024 and sell it today you would earn a total of 4,550 from holding Concurrent Technologies Plc or generate 33.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Environmental Markets vs. Concurrent Technologies Plc
Performance |
| Timeline |
| Impax Environmental |
| Concurrent Technologies |
Impax Environmental and Concurrent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and Concurrent Technologies
The main advantage of trading using opposite Impax Environmental and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental 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.| Impax Environmental vs. Gamma Communications PLC | Impax Environmental vs. Orient Telecoms | Impax Environmental vs. Cairo Communication SpA | Impax Environmental vs. Seche Environnement SA |
| Concurrent Technologies vs. Samsung Electronics Co | Concurrent Technologies vs. Samsung Electronics Co | Concurrent Technologies vs. Toyota Motor Corp | Concurrent Technologies vs. Reliance Industries Ltd |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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