Correlation Between Concurrent Technologies and Bank of Georgia

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

Diversification Opportunities for Concurrent Technologies and Bank of Georgia

0.76

Correlation Coefficient

Concurrent Technologies  Bank of Georgia

Poor diversification

The 3 months correlation between Concurrent and Bank is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Concurrent Technologies Plc and Bank of Georgia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Georgia 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 Bank of Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Georgia has no effect on the direction of Concurrent Technologies i.e., Concurrent Technologies and Bank of Georgia go up and down completely randomly.

Pair Corralation between Concurrent Technologies and Bank of Georgia

Assuming the 90 days trading horizon Concurrent Technologies Plc is expected to generate 0.9 times more return on investment than Bank of Georgia. However, Concurrent Technologies Plc is 1.11 times less risky than Bank of Georgia. It trades about 0.11 of its potential returns per unit of risk. Bank of Georgia is currently generating about 0.05 per unit of risk. If you would invest  8,022  in Concurrent Technologies Plc on October 10, 2024 and sell it today you would earn a total of  5,828  from holding Concurrent Technologies Plc or generate 72.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Concurrent Technologies Plc  vs.  Bank of Georgia

Concurrent Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Concurrent Technologies Plc are ranked lower than 11 (%) 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.

Bank of Georgia

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Georgia are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bank of Georgia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Concurrent Technologies and Bank of Georgia

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

The idea behind Concurrent Technologies Plc and Bank of Georgia 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.