Correlation Between Thoughtworks Holding and Concentrix

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

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

Diversification Opportunities for Thoughtworks Holding and Concentrix

-0.76

Correlation Coefficient

Thoughtworks Holding  Concentrix

Pay attention - limited upside

The 3 months correlation between Thoughtworks and Concentrix is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Thoughtworks Holding and Concentrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concentrix and Thoughtworks Holding 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 Thoughtworks Holding 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 Thoughtworks Holding i.e., Thoughtworks Holding and Concentrix go up and down completely randomly.

Pair Corralation between Thoughtworks Holding and Concentrix

Given the investment horizon of 90 days Thoughtworks Holding is expected to generate 0.11 times more return on investment than Concentrix. However, Thoughtworks Holding is 8.95 times less risky than Concentrix. It trades about 0.12 of its potential returns per unit of risk. Concentrix is currently generating about -0.15 per unit of risk. If you would invest  438.00  in Thoughtworks Holding on September 18, 2024 and sell it today you would earn a total of  9.00  from holding Thoughtworks Holding or generate 2.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	65.08%
Values	Daily Returns

Thoughtworks Holding  vs.  Concentrix

Thoughtworks Holding

Risk-Adjusted Performance

0 of 100

OK

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.

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 fragile 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.

Pair Trading with Thoughtworks Holding and Concentrix

The main advantage of trading using opposite Thoughtworks Holding and Concentrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thoughtworks Holding 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 Thoughtworks Holding 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.