Correlation Between Alien Metals and Concurrent Technologies

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

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

Diversification Opportunities for Alien Metals and Concurrent Technologies

-0.52

Correlation Coefficient

Alien Metals  Concurrent Technologies

Excellent diversification

The 3 months correlation between Alien and Concurrent is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Alien Metals and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies and Alien Metals 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 Alien Metals 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 Alien Metals i.e., Alien Metals and Concurrent Technologies go up and down completely randomly.

Pair Corralation between Alien Metals and Concurrent Technologies

Assuming the 90 days trading horizon Alien Metals is expected to under-perform the Concurrent Technologies. In addition to that, Alien Metals is 2.35 times more volatile than Concurrent Technologies Plc. It trades about -0.04 of its total potential returns per unit of risk. Concurrent Technologies Plc is currently generating about 0.06 per unit of volatility. If you would invest  7,626  in Concurrent Technologies Plc on October 11, 2024 and sell it today you would earn a total of  6,224  from holding Concurrent Technologies Plc or generate 81.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Alien Metals  vs.  Concurrent Technologies Plc

Alien Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alien Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Concurrent Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Concurrent Technologies Plc are ranked lower than 9 (%) 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 Alien Metals and Concurrent Technologies

The main advantage of trading using opposite Alien Metals and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alien Metals 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 Alien Metals 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.