Correlation Between CRA International and VCI Global
Can any of the company-specific risk be diversified away by investing in both CRA International and VCI Global 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 VCI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRA International and VCI Global Limited, you can compare the effects of market volatilities on CRA International and VCI Global 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 VCI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and VCI Global.
Diversification Opportunities for CRA International and VCI Global
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between CRA and VCI is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and VCI Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VCI Global Limited 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 VCI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VCI Global Limited has no effect on the direction of CRA International i.e., CRA International and VCI Global go up and down completely randomly.
Pair Corralation between CRA International and VCI Global
Given the investment horizon of 90 days CRA International is expected to generate 2.98 times less return on investment than VCI Global. But when comparing it to its historical volatility, CRA International is 14.4 times less risky than VCI Global. It trades about 0.07 of its potential returns per unit of risk. VCI Global Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 20,824 in VCI Global Limited on November 1, 2024 and sell it today you would lose (20,712) from holding VCI Global Limited or give up 99.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.36% |
| Values | Daily Returns |
CRA International vs. VCI Global Limited
Performance |
| Timeline |
| CRA International |
| VCI Global Limited |
CRA International and VCI Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRA International and VCI Global
The main advantage of trading using opposite CRA International and VCI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRA International position performs unexpectedly, VCI Global 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 VCI Global will offset losses from the drop in VCI Global's long position.| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
| VCI Global vs. Lichen China Limited | VCI Global vs. Unifirst | VCI Global vs. First Advantage Corp | VCI Global vs. Network 1 Technologies |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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