Correlation Between Science Applications and Concentrix

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

By analyzing existing cross correlation between Science Applications International and Concentrix, you can compare the effects of market volatilities on Science Applications and Concentrix 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 Science Applications with a short position of Concentrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science Applications and Concentrix.

Diversification Opportunities for Science Applications and Concentrix

-0.42

Correlation Coefficient

Science Applications  Concentrix

Very good diversification

The 3 months correlation between Science and Concentrix is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Science Applications Internati and Concentrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concentrix and Science Applications 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 Science Applications International are associated (or correlated) with Concentrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concentrix has no effect on the direction of Science Applications i.e., Science Applications and Concentrix go up and down completely randomly.

Pair Corralation between Science Applications and Concentrix

Given the investment horizon of 90 days Science Applications International is expected to under-perform the Concentrix. But the stock apears to be less risky and, when comparing its historical volatility, Science Applications International is 1.39 times less risky than Concentrix. The stock trades about -0.2 of its potential returns per unit of risk. The Concentrix is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4,467  in Concentrix on November 28, 2024 and sell it today you would earn a total of  145.00  from holding Concentrix or generate 3.25% return on investment over 90 days.

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

Science Applications Internati  vs.  Concentrix

Science Applications

Risk-Adjusted Performance

Very Weak

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

Concentrix

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Concentrix are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Concentrix is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Science Applications and Concentrix

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

The idea behind Science Applications International and Concentrix 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 Global Correlations module to find global opportunities by holding instruments from different markets.