Correlation Between CRA International and Ambipar Emergency
Can any of the company-specific risk be diversified away by investing in both CRA International and Ambipar Emergency 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 CRA International and Ambipar Emergency into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRA International and Ambipar Emergency Response, you can compare the effects of market volatilities on CRA International and Ambipar Emergency 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 CRA International with a short position of Ambipar Emergency. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and Ambipar Emergency.
Diversification Opportunities for CRA International and Ambipar Emergency
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CRA and Ambipar is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and Ambipar Emergency Response in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambipar Emergency and CRA International 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 CRA International are associated (or correlated) with Ambipar Emergency. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambipar Emergency has no effect on the direction of CRA International i.e., CRA International and Ambipar Emergency go up and down completely randomly.
Pair Corralation between CRA International and Ambipar Emergency
Given the investment horizon of 90 days CRA International is expected to generate 2.32 times less return on investment than Ambipar Emergency. But when comparing it to its historical volatility, CRA International is 2.78 times less risky than Ambipar Emergency. It trades about 0.12 of its potential returns per unit of risk. Ambipar Emergency Response is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 435.00 in Ambipar Emergency Response on September 12, 2024 and sell it today you would earn a total of 138.00 from holding Ambipar Emergency Response or generate 31.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRA International vs. Ambipar Emergency Response
Performance |
| Timeline |
| CRA International |
| Ambipar Emergency |
CRA International and Ambipar Emergency Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRA International and Ambipar Emergency
The main advantage of trading using opposite CRA International and Ambipar Emergency positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRA International position performs unexpectedly, Ambipar Emergency 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 Ambipar Emergency will offset losses from the drop in Ambipar Emergency's long position.| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
| Ambipar Emergency vs. Casella Waste Systems | Ambipar Emergency vs. Montrose Environmental Grp | Ambipar Emergency vs. LanzaTech Global | Ambipar Emergency vs. Republic Services |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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