Correlation Between United Utilities and Concurrent Technologies
Can any of the company-specific risk be diversified away by investing in both United Utilities 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 United Utilities and Concurrent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Utilities Group and Concurrent Technologies Plc, you can compare the effects of market volatilities on United Utilities 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 United Utilities with a short position of Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Utilities and Concurrent Technologies.
Diversification Opportunities for United Utilities and Concurrent Technologies
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Concurrent is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding United Utilities Group and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies and United Utilities 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 United Utilities Group 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 United Utilities i.e., United Utilities and Concurrent Technologies go up and down completely randomly.
Pair Corralation between United Utilities and Concurrent Technologies
Assuming the 90 days trading horizon United Utilities is expected to generate 6.7 times less return on investment than Concurrent Technologies. But when comparing it to its historical volatility, United Utilities Group is 1.51 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 0.16 of returns per unit of risk over similar time horizon. If you would invest 6,289 in Concurrent Technologies Plc on August 26, 2024 and sell it today you would earn a total of 8,511 from holding Concurrent Technologies Plc or generate 135.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Utilities Group vs. Concurrent Technologies Plc
Performance |
| Timeline |
| United Utilities |
| Concurrent Technologies |
United Utilities and Concurrent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Utilities and Concurrent Technologies
The main advantage of trading using opposite United Utilities and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Utilities 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.| United Utilities vs. Tlou Energy | United Utilities vs. Ikigai Ventures | United Utilities vs. Falcon Oil Gas | United Utilities vs. Golden Metal Resources |
| Concurrent Technologies vs. United Utilities Group | Concurrent Technologies vs. Accsys Technologies PLC | Concurrent Technologies vs. Young Cos Brewery | Concurrent Technologies vs. Playtech 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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