Correlation Between Concentrix and Applied Blockchain

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

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

Diversification Opportunities for Concentrix and Applied Blockchain

-0.17

Correlation Coefficient

Concentrix  Applied Blockchain

Good diversification

The 3 months correlation between Concentrix and Applied is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Concentrix and Applied Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Blockchain and Concentrix 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 Concentrix are associated (or correlated) with Applied Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Blockchain has no effect on the direction of Concentrix i.e., Concentrix and Applied Blockchain go up and down completely randomly.

Pair Corralation between Concentrix and Applied Blockchain

Given the investment horizon of 90 days Concentrix is expected to under-perform the Applied Blockchain. But the stock apears to be less risky and, when comparing its historical volatility, Concentrix is 2.09 times less risky than Applied Blockchain. The stock trades about -0.08 of its potential returns per unit of risk. The Applied Blockchain is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  825.00  in Applied Blockchain on September 26, 2024 and sell it today you would earn a total of  22.00  from holding Applied Blockchain or generate 2.67% return on investment over 90 days.

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

Concentrix  vs.  Applied Blockchain

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.

Applied Blockchain

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Blockchain are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, Applied Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Concentrix and Applied Blockchain

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

The idea behind Concentrix and Applied Blockchain 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.