Correlation Between Concurrent Technologies and Roper Technologies

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

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

Diversification Opportunities for Concurrent Technologies and Roper Technologies

0.21

Correlation Coefficient

Concurrent Technologies  Roper Technologies

Modest diversification

The 3 months correlation between Concurrent and Roper is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Concurrent Technologies Plc and Roper Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roper Technologies and Concurrent Technologies 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 Concurrent Technologies Plc are associated (or correlated) with Roper Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roper Technologies has no effect on the direction of Concurrent Technologies i.e., Concurrent Technologies and Roper Technologies go up and down completely randomly.

Pair Corralation between Concurrent Technologies and Roper Technologies

Assuming the 90 days trading horizon Concurrent Technologies Plc is expected to generate 2.68 times more return on investment than Roper Technologies. However, Concurrent Technologies is 2.68 times more volatile than Roper Technologies. It trades about 0.09 of its potential returns per unit of risk. Roper Technologies is currently generating about -0.07 per unit of risk. If you would invest  11,350  in Concurrent Technologies Plc on September 30, 2024 and sell it today you would earn a total of  1,875  from holding Concurrent Technologies Plc or generate 16.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Concurrent Technologies Plc  vs.  Roper Technologies

Concurrent Technologies

Risk-Adjusted Performance

7 of 100

OK

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.

Roper Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roper Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Roper Technologies is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Concurrent Technologies and Roper Technologies

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

The idea behind Concurrent Technologies Plc and Roper Technologies 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.