Correlation Between CRA International and Steel Connect
Can any of the company-specific risk be diversified away by investing in both CRA International and Steel Connect 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 Steel Connect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRA International and Steel Connect, you can compare the effects of market volatilities on CRA International and Steel Connect 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 Steel Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and Steel Connect.
Diversification Opportunities for CRA International and Steel Connect
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CRA and Steel is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and Steel Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Connect 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 Steel Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Connect has no effect on the direction of CRA International i.e., CRA International and Steel Connect go up and down completely randomly.
Pair Corralation between CRA International and Steel Connect
Given the investment horizon of 90 days CRA International is expected to generate 1.0 times more return on investment than Steel Connect. However, CRA International is 1.0 times more volatile than Steel Connect. It trades about 0.02 of its potential returns per unit of risk. Steel Connect is currently generating about -0.04 per unit of risk. If you would invest 19,379 in CRA International on August 31, 2024 and sell it today you would earn a total of 35.00 from holding CRA International or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRA International vs. Steel Connect
Performance |
| Timeline |
| CRA International |
| Steel Connect |
CRA International and Steel Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRA International and Steel Connect
The main advantage of trading using opposite CRA International and Steel Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRA International position performs unexpectedly, Steel Connect 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 Steel Connect will offset losses from the drop in Steel Connect's long position.| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
| Steel Connect vs. Baosheng Media Group | Steel Connect vs. Impact Fusion International | Steel Connect vs. Mirriad Advertising plc | Steel Connect vs. CyberAgent ADR |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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