Correlation Between CRA International and Stantec
Can any of the company-specific risk be diversified away by investing in both CRA International and Stantec 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 Stantec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRA International and Stantec, you can compare the effects of market volatilities on CRA International and Stantec 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 Stantec. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and Stantec.
Diversification Opportunities for CRA International and Stantec
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CRA and Stantec is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and Stantec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stantec 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 Stantec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stantec has no effect on the direction of CRA International i.e., CRA International and Stantec go up and down completely randomly.
Pair Corralation between CRA International and Stantec
Given the investment horizon of 90 days CRA International is expected to generate 4.49 times less return on investment than Stantec. In addition to that, CRA International is 1.9 times more volatile than Stantec. It trades about 0.02 of its total potential returns per unit of risk. Stantec is currently generating about 0.14 per unit of volatility. If you would invest 8,209 in Stantec on August 31, 2024 and sell it today you would earn a total of 362.00 from holding Stantec or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRA International vs. Stantec
Performance |
| Timeline |
| CRA International |
| Stantec |
CRA International and Stantec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRA International and Stantec
The main advantage of trading using opposite CRA International and Stantec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRA International position performs unexpectedly, Stantec 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 Stantec will offset losses from the drop in Stantec's long position.| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
| Stantec vs. CRA International | Stantec vs. Huron Consulting Group | Stantec vs. Forrester Research | Stantec vs. Resources Connection |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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