Correlation Between Concentrix and Thoughtworks Holding

Can any of the company-specific risk be diversified away by investing in both Concentrix and Thoughtworks Holding 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 Thoughtworks Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Concentrix and Thoughtworks Holding, you can compare the effects of market volatilities on Concentrix and Thoughtworks Holding 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 Thoughtworks Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concentrix and Thoughtworks Holding.

Diversification Opportunities for Concentrix and Thoughtworks Holding

-0.62

Correlation Coefficient

Concentrix  Thoughtworks Holding

Excellent diversification

The 3 months correlation between Concentrix and Thoughtworks is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Concentrix and Thoughtworks Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thoughtworks Holding 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 Thoughtworks Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thoughtworks Holding has no effect on the direction of Concentrix i.e., Concentrix and Thoughtworks Holding go up and down completely randomly.

Pair Corralation between Concentrix and Thoughtworks Holding

Given the investment horizon of 90 days Concentrix is expected to under-perform the Thoughtworks Holding. But the stock apears to be less risky and, when comparing its historical volatility, Concentrix is 1.52 times less risky than Thoughtworks Holding. The stock trades about -0.07 of its potential returns per unit of risk. The Thoughtworks Holding is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,135  in Thoughtworks Holding on October 7, 2024 and sell it today you would lose (688.00) from holding Thoughtworks Holding or give up 60.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	92.94%
Values	Daily Returns

Concentrix  vs.  Thoughtworks Holding

Concentrix

Risk-Adjusted Performance

0 of 100

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 latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Thoughtworks Holding

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Thoughtworks Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Thoughtworks Holding 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 Concentrix and Thoughtworks Holding

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

The idea behind Concentrix and Thoughtworks Holding 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..