Correlation Between Bowman Consulting and Energy Services
Can any of the company-specific risk be diversified away by investing in both Bowman Consulting and Energy Services 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 Bowman Consulting and Energy Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bowman Consulting Group and Energy Services, you can compare the effects of market volatilities on Bowman Consulting and Energy Services 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 Bowman Consulting with a short position of Energy Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowman Consulting and Energy Services.
Diversification Opportunities for Bowman Consulting and Energy Services
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bowman and Energy is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bowman Consulting Group and Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Services and Bowman Consulting 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 Bowman Consulting Group are associated (or correlated) with Energy Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Services has no effect on the direction of Bowman Consulting i.e., Bowman Consulting and Energy Services go up and down completely randomly.
Pair Corralation between Bowman Consulting and Energy Services
Given the investment horizon of 90 days Bowman Consulting Group is expected to generate 0.4 times more return on investment than Energy Services. However, Bowman Consulting Group is 2.5 times less risky than Energy Services. It trades about 0.03 of its potential returns per unit of risk. Energy Services is currently generating about 0.0 per unit of risk. If you would invest 2,469 in Bowman Consulting Group on November 9, 2024 and sell it today you would earn a total of 23.00 from holding Bowman Consulting Group or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bowman Consulting Group vs. Energy Services
Performance |
| Timeline |
| Bowman Consulting |
| Energy Services |
Bowman Consulting and Energy Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowman Consulting and Energy Services
The main advantage of trading using opposite Bowman Consulting and Energy Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowman Consulting position performs unexpectedly, Energy Services 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 Energy Services will offset losses from the drop in Energy Services' long position.| Bowman Consulting vs. EMCOR Group | Bowman Consulting vs. Comfort Systems USA | Bowman Consulting vs. Primoris Services | Bowman Consulting vs. Granite Construction Incorporated |
| Energy Services vs. Bouygues SA | Energy Services vs. NV5 Global | Energy Services vs. Matrix Service Co | Energy Services vs. MYR Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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