Correlation Between CSE Global and Hackett
Can any of the company-specific risk be diversified away by investing in both CSE Global and Hackett 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 CSE Global and Hackett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSE Global Limited and The Hackett Group, you can compare the effects of market volatilities on CSE Global and Hackett 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 CSE Global with a short position of Hackett. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSE Global and Hackett.
Diversification Opportunities for CSE Global and Hackett
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CSE and Hackett is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CSE Global Limited and The Hackett Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hackett Group and CSE Global 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 CSE Global Limited are associated (or correlated) with Hackett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hackett Group has no effect on the direction of CSE Global i.e., CSE Global and Hackett go up and down completely randomly.
Pair Corralation between CSE Global and Hackett
Assuming the 90 days horizon CSE Global Limited is expected to generate 2.82 times more return on investment than Hackett. However, CSE Global is 2.82 times more volatile than The Hackett Group. It trades about 0.03 of its potential returns per unit of risk. The Hackett Group is currently generating about 0.05 per unit of risk. If you would invest 30.00 in CSE Global Limited on October 25, 2024 and sell it today you would earn a total of 4.00 from holding CSE Global Limited or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 82.59% |
| Values | Daily Returns |
CSE Global Limited vs. The Hackett Group
Performance |
| Timeline |
| CSE Global Limited |
| Hackett Group |
CSE Global and Hackett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSE Global and Hackett
The main advantage of trading using opposite CSE Global and Hackett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSE Global position performs unexpectedly, Hackett 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 Hackett will offset losses from the drop in Hackett's long position.| CSE Global vs. Appen Limited | CSE Global vs. Appen Limited | CSE Global vs. Deveron Corp | CSE Global vs. Capgemini SE ADR |
| Hackett vs. Information Services Group | Hackett vs. Home Bancorp | Hackett vs. Heritage Financial | Hackett vs. CRA International |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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