Correlation Between CRA International and Booz Allen
Can any of the company-specific risk be diversified away by investing in both CRA International 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 CRA International and Booz Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRA International and Booz Allen Hamilton, you can compare the effects of market volatilities on CRA International 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 CRA International with a short position of Booz Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and Booz Allen.
Diversification Opportunities for CRA International and Booz Allen
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CRA and Booz is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CRA International 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 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 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 CRA International i.e., CRA International and Booz Allen go up and down completely randomly.
Pair Corralation between CRA International and Booz Allen
Given the investment horizon of 90 days CRA International is expected to generate 2.52 times less return on investment than Booz Allen. But when comparing it to its historical volatility, CRA International 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 0.02 of returns per unit of risk over similar time horizon. If you would invest 12,812 in Booz Allen Hamilton on November 3, 2024 and sell it today you would earn a total of 81.00 from holding Booz Allen Hamilton or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
CRA International vs. Booz Allen Hamilton
Performance |
| Timeline |
| CRA International |
| Booz Allen Hamilton |
CRA International and Booz Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRA International and Booz Allen
The main advantage of trading using opposite CRA International and Booz Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRA International 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.| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
| Booz Allen vs. Huron Consulting Group | Booz Allen vs. CRA International | Booz Allen vs. Forrester Research | Booz Allen vs. Exponent |
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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