Correlation Between Booz Allen and Exponent
Can any of the company-specific risk be diversified away by investing in both Booz Allen and Exponent 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 Exponent 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 Exponent, you can compare the effects of market volatilities on Booz Allen and Exponent 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 Exponent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Booz Allen and Exponent.
Diversification Opportunities for Booz Allen and Exponent
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Booz and Exponent is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Booz Allen Hamilton and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent 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 Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of Booz Allen i.e., Booz Allen and Exponent go up and down completely randomly.
Pair Corralation between Booz Allen and Exponent
Considering the 90-day investment horizon Booz Allen Hamilton is expected to under-perform the Exponent. In addition to that, Booz Allen is 1.84 times more volatile than Exponent. It trades about -0.04 of its total potential returns per unit of risk. Exponent is currently generating about 0.14 per unit of volatility. If you would invest 8,891 in Exponent on November 4, 2024 and sell it today you would earn a total of 276.00 from holding Exponent or generate 3.1% 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. Exponent
Performance |
| Timeline |
| Booz Allen Hamilton |
| Exponent |
Booz Allen and Exponent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Booz Allen and Exponent
The main advantage of trading using opposite Booz Allen and Exponent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booz Allen position performs unexpectedly, Exponent 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 Exponent will offset losses from the drop in Exponent's long position.| Booz Allen vs. Huron Consulting Group | Booz Allen vs. CRA International | Booz Allen vs. Forrester Research | Booz Allen vs. Exponent |
| Exponent vs. CRA International | Exponent vs. Huron Consulting Group | Exponent vs. Forrester Research | Exponent vs. Resources Connection |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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