Correlation Between Concurrent Technologies and GB Group

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

Diversification Opportunities for Concurrent Technologies and GB Group

0.86

Correlation Coefficient

Concurrent Technologies  GB Group

Very poor diversification

The 3 months correlation between Concurrent and GBG is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Concurrent Technologies Plc and GB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GB Group plc 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 GB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GB Group plc has no effect on the direction of Concurrent Technologies i.e., Concurrent Technologies and GB Group go up and down completely randomly.

Pair Corralation between Concurrent Technologies and GB Group

Assuming the 90 days trading horizon Concurrent Technologies is expected to generate 1.0 times less return on investment than GB Group. In addition to that, Concurrent Technologies is 1.07 times more volatile than GB Group plc. It trades about 0.08 of its total potential returns per unit of risk. GB Group plc is currently generating about 0.09 per unit of volatility. If you would invest  30,920  in GB Group plc on September 16, 2024 and sell it today you would earn a total of  4,700  from holding GB Group plc or generate 15.2% return on investment over 90 days.

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

Concurrent Technologies Plc  vs.  GB Group plc

Concurrent Technologies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Concurrent Technologies Plc are ranked lower than 6 (%) 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.

GB Group plc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GB Group plc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GB Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Concurrent Technologies and GB Group

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

The idea behind Concurrent Technologies Plc and GB Group plc 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.