Correlation Between Booz Allen and CRA International
Can any of the company-specific risk be diversified away by investing in both Booz Allen 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 Booz Allen and CRA International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Booz Allen Hamilton and CRA International, you can compare the effects of market volatilities on Booz Allen 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 Booz Allen with a short position of CRA International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Booz Allen and CRA International.
Diversification Opportunities for Booz Allen and CRA International
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Booz and CRA is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Booz Allen Hamilton and CRA International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRA International and Booz Allen 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 Booz Allen Hamilton 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 Booz Allen i.e., Booz Allen and CRA International go up and down completely randomly.
Pair Corralation between Booz Allen and CRA International
Considering the 90-day investment horizon Booz Allen Hamilton is expected to under-perform the CRA International. In addition to that, Booz Allen is 1.42 times more volatile than CRA International. It trades about -0.01 of its total potential returns per unit of risk. CRA International is currently generating about 0.12 per unit of volatility. If you would invest 18,405 in CRA International on November 9, 2024 and sell it today you would earn a total of 645.00 from holding CRA International or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Booz Allen Hamilton vs. CRA International
Performance |
| Timeline |
| Booz Allen Hamilton |
| CRA International |
Booz Allen and CRA International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Booz Allen and CRA International
The main advantage of trading using opposite Booz Allen and CRA International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booz Allen 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.| Booz Allen vs. Huron Consulting Group | Booz Allen vs. CRA International | Booz Allen vs. Forrester Research | Booz Allen vs. Exponent |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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