Correlation Between Concurrent Technologies and National Beverage

Can any of the company-specific risk be diversified away by investing in both Concurrent Technologies and National Beverage 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 National Beverage 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 National Beverage Corp, you can compare the effects of market volatilities on Concurrent Technologies and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concurrent Technologies and National Beverage.

Diversification Opportunities for Concurrent Technologies and National Beverage

0.11

Correlation Coefficient

Concurrent Technologies  National Beverage

Average diversification

The 3 months correlation between Concurrent and National is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Concurrent Technologies Plc and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Concurrent Technologies i.e., Concurrent Technologies and National Beverage go up and down completely randomly.

Pair Corralation between Concurrent Technologies and National Beverage

Assuming the 90 days trading horizon Concurrent Technologies Plc is expected to generate 1.99 times more return on investment than National Beverage. However, Concurrent Technologies is 1.99 times more volatile than National Beverage Corp. It trades about 0.23 of its potential returns per unit of risk. National Beverage Corp is currently generating about -0.05 per unit of risk. If you would invest  11,125  in Concurrent Technologies Plc on October 23, 2024 and sell it today you would earn a total of  5,725  from holding Concurrent Technologies Plc or generate 51.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Concurrent Technologies Plc  vs.  National Beverage Corp

Concurrent Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Concurrent Technologies Plc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Concurrent Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

National Beverage Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, National Beverage is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Concurrent Technologies and National Beverage

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

The idea behind Concurrent Technologies Plc and National Beverage Corp 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.