Correlation Between Concentrix and Castellum

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Can any of the company-specific risk be diversified away by investing in both Concentrix and Castellum 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 Concentrix and Castellum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concentrix and Castellum, you can compare the effects of market volatilities on Concentrix and Castellum 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 Concentrix with a short position of Castellum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concentrix and Castellum.

Diversification Opportunities for Concentrix and Castellum

-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between Concentrix and Castellum is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Concentrix and Castellum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellum and Concentrix 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 Concentrix are associated (or correlated) with Castellum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellum has no effect on the direction of Concentrix i.e., Concentrix and Castellum go up and down completely randomly.

Pair Corralation between Concentrix and Castellum

Given the investment horizon of 90 days Concentrix is expected to under-perform the Castellum. But the stock apears to be less risky and, when comparing its historical volatility, Concentrix is 2.98 times less risky than Castellum. The stock trades about -0.08 of its potential returns per unit of risk. The Castellum is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  119.00  in Castellum on September 24, 2024 and sell it today you would lose (76.80) from holding Castellum or give up 64.54% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Concentrix  vs.  Castellum

 Performance 
       Timeline  
Concentrix 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Concentrix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Castellum 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Castellum are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Castellum displayed solid returns over the last few months and may actually be approaching a breakup point.

Concentrix and Castellum Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Concentrix and Castellum

The main advantage of trading using opposite Concentrix and Castellum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concentrix position performs unexpectedly, Castellum 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 Castellum will offset losses from the drop in Castellum's long position.
The idea behind Concentrix and Castellum 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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