Correlation Between CRA International and BrightView Holdings
Can any of the company-specific risk be diversified away by investing in both CRA International and BrightView Holdings 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 BrightView Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRA International and BrightView Holdings, you can compare the effects of market volatilities on CRA International and BrightView Holdings 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 BrightView Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and BrightView Holdings.
Diversification Opportunities for CRA International and BrightView Holdings
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CRA and BrightView is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and BrightView Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightView Holdings 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 BrightView Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrightView Holdings has no effect on the direction of CRA International i.e., CRA International and BrightView Holdings go up and down completely randomly.
Pair Corralation between CRA International and BrightView Holdings
Given the investment horizon of 90 days CRA International is expected to under-perform the BrightView Holdings. But the stock apears to be less risky and, when comparing its historical volatility, CRA International is 1.86 times less risky than BrightView Holdings. The stock trades about -0.18 of its potential returns per unit of risk. The BrightView Holdings is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,873 in BrightView Holdings on September 12, 2024 and sell it today you would lose (151.00) from holding BrightView Holdings or give up 8.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRA International vs. BrightView Holdings
Performance |
| Timeline |
| CRA International |
| BrightView Holdings |
CRA International and BrightView Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRA International and BrightView Holdings
The main advantage of trading using opposite CRA International and BrightView Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRA International position performs unexpectedly, BrightView Holdings 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 BrightView Holdings will offset losses from the drop in BrightView Holdings' long position.| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
| BrightView Holdings vs. Network 1 Technologies | BrightView Holdings vs. Civeo Corp | BrightView Holdings vs. Maximus | BrightView Holdings vs. CBIZ Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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