Correlation Between Bureau Veritas and Booz Allen
Can any of the company-specific risk be diversified away by investing in both Bureau Veritas and Booz Allen 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 Bureau Veritas and Booz Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bureau Veritas SA and Booz Allen Hamilton, you can compare the effects of market volatilities on Bureau Veritas and Booz Allen 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 Bureau Veritas with a short position of Booz Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bureau Veritas and Booz Allen.
Diversification Opportunities for Bureau Veritas and Booz Allen
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bureau and Booz is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bureau Veritas SA and Booz Allen Hamilton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booz Allen Hamilton and Bureau Veritas 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 Bureau Veritas SA are associated (or correlated) with Booz Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booz Allen Hamilton has no effect on the direction of Bureau Veritas i.e., Bureau Veritas and Booz Allen go up and down completely randomly.
Pair Corralation between Bureau Veritas and Booz Allen
Assuming the 90 days horizon Bureau Veritas SA is expected to generate 0.68 times more return on investment than Booz Allen. However, Bureau Veritas SA is 1.47 times less risky than Booz Allen. It trades about 0.01 of its potential returns per unit of risk. Booz Allen Hamilton is currently generating about 0.0 per unit of risk. If you would invest 5,869 in Bureau Veritas SA on August 24, 2024 and sell it today you would lose (21.00) from holding Bureau Veritas SA or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bureau Veritas SA vs. Booz Allen Hamilton
Performance |
| Timeline |
| Bureau Veritas SA |
| Booz Allen Hamilton |
Bureau Veritas and Booz Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bureau Veritas and Booz Allen
The main advantage of trading using opposite Bureau Veritas and Booz Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bureau Veritas position performs unexpectedly, Booz Allen 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 Booz Allen will offset losses from the drop in Booz Allen's long position.| Bureau Veritas vs. Experian plc PK | Bureau Veritas vs. Equifax | Bureau Veritas vs. TransUnion | Bureau Veritas vs. Booz Allen Hamilton |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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