Correlation Between HACKETT GROUP and CVW CLEANTECH
Can any of the company-specific risk be diversified away by investing in both HACKETT GROUP and CVW CLEANTECH 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 HACKETT GROUP and CVW CLEANTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HACKETT GROUP and CVW CLEANTECH INC, you can compare the effects of market volatilities on HACKETT GROUP and CVW CLEANTECH 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 HACKETT GROUP with a short position of CVW CLEANTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of HACKETT GROUP and CVW CLEANTECH.
Diversification Opportunities for HACKETT GROUP and CVW CLEANTECH
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HACKETT and CVW is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding HACKETT GROUP and CVW CLEANTECH INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CLEANTECH INC and HACKETT GROUP 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 HACKETT GROUP are associated (or correlated) with CVW CLEANTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CLEANTECH INC has no effect on the direction of HACKETT GROUP i.e., HACKETT GROUP and CVW CLEANTECH go up and down completely randomly.
Pair Corralation between HACKETT GROUP and CVW CLEANTECH
Assuming the 90 days trading horizon HACKETT GROUP is expected to generate 0.42 times more return on investment than CVW CLEANTECH. However, HACKETT GROUP is 2.41 times less risky than CVW CLEANTECH. It trades about 0.07 of its potential returns per unit of risk. CVW CLEANTECH INC is currently generating about 0.02 per unit of risk. If you would invest 1,989 in HACKETT GROUP on September 12, 2024 and sell it today you would earn a total of 1,011 from holding HACKETT GROUP or generate 50.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
HACKETT GROUP vs. CVW CLEANTECH INC
Performance |
| Timeline |
| HACKETT GROUP |
| CVW CLEANTECH INC |
HACKETT GROUP and CVW CLEANTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HACKETT GROUP and CVW CLEANTECH
The main advantage of trading using opposite HACKETT GROUP and CVW CLEANTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HACKETT GROUP position performs unexpectedly, CVW CLEANTECH 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 CVW CLEANTECH will offset losses from the drop in CVW CLEANTECH's long position.| HACKETT GROUP vs. CVW CLEANTECH INC | HACKETT GROUP vs. CHINA TELECOM H | HACKETT GROUP vs. Charter Communications | HACKETT GROUP vs. Laureate Education |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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