Correlation Between Concentrix and Globant SA

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

By analyzing existing cross correlation between Concentrix and Globant SA, you can compare the effects of market volatilities on Concentrix and Globant SA 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 Globant SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concentrix and Globant SA.

Diversification Opportunities for Concentrix and Globant SA

-0.69

Correlation Coefficient

Concentrix  Globant SA

Excellent diversification

The 3 months correlation between Concentrix and Globant is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Concentrix and Globant SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globant SA 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 Globant SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globant SA has no effect on the direction of Concentrix i.e., Concentrix and Globant SA go up and down completely randomly.

Pair Corralation between Concentrix and Globant SA

Given the investment horizon of 90 days Concentrix is expected to under-perform the Globant SA. In addition to that, Concentrix is 1.35 times more volatile than Globant SA. It trades about -0.21 of its total potential returns per unit of risk. Globant SA is currently generating about 0.09 per unit of volatility. If you would invest  20,224  in Globant SA on August 30, 2024 and sell it today you would earn a total of  2,731  from holding Globant SA or generate 13.5% return on investment over 90 days.

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

Concentrix  vs.  Globant SA

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 December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Globant SA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Globant SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Globant SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Concentrix and Globant SA

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

The idea behind Concentrix and Globant SA 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.