Correlation Between CRA International and Thermon Group
Can any of the company-specific risk be diversified away by investing in both CRA International and Thermon Group 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 Thermon Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRA International and Thermon Group Holdings, you can compare the effects of market volatilities on CRA International and Thermon Group 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 Thermon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and Thermon Group.
Diversification Opportunities for CRA International and Thermon Group
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between CRA and Thermon is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and Thermon Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermon Group 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 Thermon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermon Group Holdings has no effect on the direction of CRA International i.e., CRA International and Thermon Group go up and down completely randomly.
Pair Corralation between CRA International and Thermon Group
Given the investment horizon of 90 days CRA International is expected to generate 9.2 times less return on investment than Thermon Group. In addition to that, CRA International is 1.08 times more volatile than Thermon Group Holdings. It trades about 0.03 of its total potential returns per unit of risk. Thermon Group Holdings is currently generating about 0.3 per unit of volatility. If you would invest 2,754 in Thermon Group Holdings on August 28, 2024 and sell it today you would earn a total of 470.00 from holding Thermon Group Holdings or generate 17.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRA International vs. Thermon Group Holdings
Performance |
| Timeline |
| CRA International |
| Thermon Group Holdings |
CRA International and Thermon Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRA International and Thermon Group
The main advantage of trading using opposite CRA International and Thermon Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRA International position performs unexpectedly, Thermon Group 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 Thermon Group will offset losses from the drop in Thermon Group's long position.| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
| Thermon Group vs. Hurco Companies | Thermon Group vs. Enerpac Tool Group | Thermon Group vs. Enpro Industries | Thermon Group vs. Omega Flex |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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