Correlation Between Aecom Technology and CRA International
Can any of the company-specific risk be diversified away by investing in both Aecom Technology and CRA International 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 Aecom Technology and CRA International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aecom Technology and CRA International, you can compare the effects of market volatilities on Aecom Technology and CRA International 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 Aecom Technology with a short position of CRA International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aecom Technology and CRA International.
Diversification Opportunities for Aecom Technology and CRA International
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aecom and CRA is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aecom Technology and CRA International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRA International and Aecom Technology 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 Aecom Technology are associated (or correlated) with CRA International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRA International has no effect on the direction of Aecom Technology i.e., Aecom Technology and CRA International go up and down completely randomly.
Pair Corralation between Aecom Technology and CRA International
Considering the 90-day investment horizon Aecom Technology is expected to generate 0.72 times more return on investment than CRA International. However, Aecom Technology is 1.39 times less risky than CRA International. It trades about 0.17 of its potential returns per unit of risk. CRA International is currently generating about 0.04 per unit of risk. If you would invest 8,469 in Aecom Technology on September 2, 2024 and sell it today you would earn a total of 3,228 from holding Aecom Technology or generate 38.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aecom Technology vs. CRA International
Performance |
| Timeline |
| Aecom Technology |
| CRA International |
Aecom Technology and CRA International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aecom Technology and CRA International
The main advantage of trading using opposite Aecom Technology and CRA International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aecom Technology position performs unexpectedly, CRA International 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 CRA International will offset losses from the drop in CRA International's long position.| Aecom Technology vs. Quanta Services | Aecom Technology vs. KBR Inc | Aecom Technology vs. Fluor | Aecom Technology vs. Tetra Tech |
| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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