Correlation Between Booz Allen and Equifax
Can any of the company-specific risk be diversified away by investing in both Booz Allen and Equifax 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 Equifax 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 Equifax, you can compare the effects of market volatilities on Booz Allen and Equifax 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 Equifax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Booz Allen and Equifax.
Diversification Opportunities for Booz Allen and Equifax
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Booz and Equifax is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Booz Allen Hamilton and Equifax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equifax 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 Equifax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equifax has no effect on the direction of Booz Allen i.e., Booz Allen and Equifax go up and down completely randomly.
Pair Corralation between Booz Allen and Equifax
Considering the 90-day investment horizon Booz Allen Hamilton is expected to under-perform the Equifax. In addition to that, Booz Allen is 1.23 times more volatile than Equifax. It trades about -0.04 of its total potential returns per unit of risk. Equifax is currently generating about 0.24 per unit of volatility. If you would invest 25,339 in Equifax on November 4, 2024 and sell it today you would earn a total of 2,139 from holding Equifax or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Booz Allen Hamilton vs. Equifax
Performance |
| Timeline |
| Booz Allen Hamilton |
| Equifax |
Booz Allen and Equifax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Booz Allen and Equifax
The main advantage of trading using opposite Booz Allen and Equifax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booz Allen position performs unexpectedly, Equifax 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 Equifax will offset losses from the drop in Equifax's long position.| Booz Allen vs. Huron Consulting Group | Booz Allen vs. CRA International | Booz Allen vs. Forrester Research | Booz Allen vs. Exponent |
| Equifax vs. Verisk Analytics | Equifax vs. Exponent | Equifax vs. FTI Consulting | Equifax vs. Franklin Covey |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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