Correlation Between International Business and Concentrix

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

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

Diversification Opportunities for International Business and Concentrix

0.28

Correlation Coefficient

International Business  Concentrix

Modest diversification

The 3 months correlation between International and Concentrix is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Concentrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concentrix and International Business 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 International Business Machines 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 International Business i.e., International Business and Concentrix go up and down completely randomly.

Pair Corralation between International Business and Concentrix

Considering the 90-day investment horizon International Business Machines is expected to under-perform the Concentrix. But the stock apears to be less risky and, when comparing its historical volatility, International Business Machines is 1.61 times less risky than Concentrix. The stock trades about -0.15 of its potential returns per unit of risk. The Concentrix is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  7,092  in Concentrix on March 4, 2024 and sell it today you would lose (959.00) from holding Concentrix or give up 13.52% of portfolio value over 90 days.

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

International Business Machine  vs.  Concentrix

International Business

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Business Machines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in July 2024. The recent disarray may also be a sign of long period up-swing for the firm 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 latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with International Business and Concentrix

The main advantage of trading using opposite International Business and Concentrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business 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 International Business Machines 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.