Correlation Between Concurrent Technologies and Life Science

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

Diversification Opportunities for Concurrent Technologies and Life Science

-0.34

Correlation Coefficient

Concurrent Technologies  Life Science

Very good diversification

The 3 months correlation between Concurrent and Life is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Concurrent Technologies Plc and Life Science REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Science REIT 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 Life Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Science REIT has no effect on the direction of Concurrent Technologies i.e., Concurrent Technologies and Life Science go up and down completely randomly.

Pair Corralation between Concurrent Technologies and Life Science

Assuming the 90 days trading horizon Concurrent Technologies is expected to generate 1.02 times less return on investment than Life Science. But when comparing it to its historical volatility, Concurrent Technologies Plc is 1.03 times less risky than Life Science. It trades about 0.12 of its potential returns per unit of risk. Life Science REIT is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,880  in Life Science REIT on December 23, 2024 and sell it today you would earn a total of  760.00  from holding Life Science REIT or generate 19.59% return on investment over 90 days.

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

Concurrent Technologies Plc  vs.  Life Science REIT

Concurrent Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Concurrent Technologies Plc are ranked lower than 9 (%) 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.

Life Science REIT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Life Science REIT are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Life Science unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Concurrent Technologies and Life Science

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

The idea behind Concurrent Technologies Plc and Life Science REIT 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.