Correlation Between CRA International and Entergy New
Can any of the company-specific risk be diversified away by investing in both CRA International and Entergy New 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 Entergy New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRA International and Entergy New Orleans, you can compare the effects of market volatilities on CRA International and Entergy New 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 Entergy New. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and Entergy New.
Diversification Opportunities for CRA International and Entergy New
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between CRA and Entergy is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and Entergy New Orleans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy New Orleans 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 Entergy New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy New Orleans has no effect on the direction of CRA International i.e., CRA International and Entergy New go up and down completely randomly.
Pair Corralation between CRA International and Entergy New
Given the investment horizon of 90 days CRA International is expected to generate 2.85 times more return on investment than Entergy New. However, CRA International is 2.85 times more volatile than Entergy New Orleans. It trades about 0.13 of its potential returns per unit of risk. Entergy New Orleans is currently generating about -0.06 per unit of risk. If you would invest 16,316 in CRA International on September 4, 2024 and sell it today you would earn a total of 2,848 from holding CRA International or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRA International vs. Entergy New Orleans
Performance |
| Timeline |
| CRA International |
| Entergy New Orleans |
CRA International and Entergy New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRA International and Entergy New
The main advantage of trading using opposite CRA International and Entergy New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRA International position performs unexpectedly, Entergy New 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 Entergy New will offset losses from the drop in Entergy New's long position.| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
| Entergy New vs. CRA International | Entergy New vs. ICF International | Entergy New vs. Forrester Research | Entergy New vs. Huron Consulting 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 Directory module to find actively traded commodities issued by global exchanges.
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