Correlation Between Moonpig Group and Concurrent Technologies

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

By analyzing existing cross correlation between Moonpig Group PLC and Concurrent Technologies Plc, you can compare the effects of market volatilities on Moonpig Group and Concurrent Technologies 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 Moonpig Group with a short position of Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moonpig Group and Concurrent Technologies.

Diversification Opportunities for Moonpig Group and Concurrent Technologies

0.45

Correlation Coefficient

Moonpig Group  Concurrent Technologies

Very weak diversification

The 3 months correlation between Moonpig and Concurrent is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Moonpig Group PLC and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies and Moonpig Group 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 Moonpig Group PLC are associated (or correlated) with Concurrent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concurrent Technologies has no effect on the direction of Moonpig Group i.e., Moonpig Group and Concurrent Technologies go up and down completely randomly.

Pair Corralation between Moonpig Group and Concurrent Technologies

Assuming the 90 days trading horizon Moonpig Group is expected to generate 1.63 times less return on investment than Concurrent Technologies. But when comparing it to its historical volatility, Moonpig Group PLC is 1.11 times less risky than Concurrent Technologies. It trades about 0.06 of its potential returns per unit of risk. Concurrent Technologies Plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  10,350  in Concurrent Technologies Plc on September 27, 2024 and sell it today you would earn a total of  2,875  from holding Concurrent Technologies Plc or generate 27.78% return on investment over 90 days.

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

Moonpig Group PLC  vs.  Concurrent Technologies Plc

Moonpig Group PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Moonpig Group PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Moonpig Group is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Concurrent Technologies

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Concurrent Technologies Plc are ranked lower than 7 (%) 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.

Pair Trading with Moonpig Group and Concurrent Technologies

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

The idea behind Moonpig Group PLC and Concurrent Technologies 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.