Correlation Between CRA International and TransUnion
Can any of the company-specific risk be diversified away by investing in both CRA International and TransUnion 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 TransUnion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRA International and TransUnion, you can compare the effects of market volatilities on CRA International and TransUnion 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 TransUnion. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and TransUnion.
Diversification Opportunities for CRA International and TransUnion
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CRA and TransUnion is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and TransUnion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransUnion 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 TransUnion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransUnion has no effect on the direction of CRA International i.e., CRA International and TransUnion go up and down completely randomly.
Pair Corralation between CRA International and TransUnion
Given the investment horizon of 90 days CRA International is expected to generate 1.11 times less return on investment than TransUnion. But when comparing it to its historical volatility, CRA International is 1.13 times less risky than TransUnion. It trades about 0.06 of its potential returns per unit of risk. TransUnion is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,801 in TransUnion on August 27, 2024 and sell it today you would earn a total of 4,112 from holding TransUnion or generate 70.88% 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. TransUnion
Performance |
| Timeline |
| CRA International |
| TransUnion |
CRA International and TransUnion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRA International and TransUnion
The main advantage of trading using opposite CRA International and TransUnion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRA International position performs unexpectedly, TransUnion 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 TransUnion will offset losses from the drop in TransUnion's long position.| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
| TransUnion vs. Exponent | TransUnion vs. Verisk Analytics | TransUnion vs. FTI Consulting | TransUnion vs. Forrester Research |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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