Correlation Between CRA International and Hackett
Can any of the company-specific risk be diversified away by investing in both CRA International and Hackett 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 Hackett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRA International and The Hackett Group, you can compare the effects of market volatilities on CRA International and Hackett 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 Hackett. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and Hackett.
Diversification Opportunities for CRA International and Hackett
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CRA and Hackett is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and The Hackett Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hackett Group 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 Hackett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hackett Group has no effect on the direction of CRA International i.e., CRA International and Hackett go up and down completely randomly.
Pair Corralation between CRA International and Hackett
Given the investment horizon of 90 days CRA International is expected to generate 39.67 times less return on investment than Hackett. But when comparing it to its historical volatility, CRA International is 1.54 times less risky than Hackett. It trades about 0.01 of its potential returns per unit of risk. The Hackett Group is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,500 in The Hackett Group on August 24, 2024 and sell it today you would earn a total of 568.00 from holding The Hackett Group or generate 22.72% 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. The Hackett Group
Performance |
| Timeline |
| CRA International |
| Hackett Group |
CRA International and Hackett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRA International and Hackett
The main advantage of trading using opposite CRA International and Hackett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRA International position performs unexpectedly, Hackett 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 Hackett will offset losses from the drop in Hackett's long position.| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
| Hackett vs. Information Services Group | Hackett vs. Home Bancorp | Hackett vs. Heritage Financial | Hackett vs. CRA International |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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