Correlation Between Concurrent Technologies and Ally Financial

Can any of the company-specific risk be diversified away by investing in both Concurrent Technologies and Ally Financial 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 Concurrent Technologies and Ally Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Concurrent Technologies Plc and Ally Financial, you can compare the effects of market volatilities on Concurrent Technologies and Ally Financial 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 Concurrent Technologies with a short position of Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concurrent Technologies and Ally Financial.

Diversification Opportunities for Concurrent Technologies and Ally Financial

0.59

Correlation Coefficient

Concurrent Technologies  Ally Financial

Very weak diversification

The 3 months correlation between Concurrent and Ally is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Concurrent Technologies Plc and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial and Concurrent Technologies 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 Concurrent Technologies Plc are associated (or correlated) with Ally Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ally Financial has no effect on the direction of Concurrent Technologies i.e., Concurrent Technologies and Ally Financial go up and down completely randomly.

Pair Corralation between Concurrent Technologies and Ally Financial

Assuming the 90 days trading horizon Concurrent Technologies Plc is expected to generate 1.84 times more return on investment than Ally Financial. However, Concurrent Technologies is 1.84 times more volatile than Ally Financial. It trades about 0.38 of its potential returns per unit of risk. Ally Financial is currently generating about 0.23 per unit of risk. If you would invest  13,250  in Concurrent Technologies Plc on October 22, 2024 and sell it today you would earn a total of  3,025  from holding Concurrent Technologies Plc or generate 22.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Concurrent Technologies Plc  vs.  Ally Financial

Concurrent Technologies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Concurrent Technologies Plc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Concurrent Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ally Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ally Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Ally Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Concurrent Technologies and Ally Financial

The main advantage of trading using opposite Concurrent Technologies and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concurrent Technologies position performs unexpectedly, Ally Financial 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 Ally Financial will offset losses from the drop in Ally Financial's long position.

The idea behind Concurrent Technologies Plc and Ally Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.