Correlation Between Exponent and Booz Allen
Can any of the company-specific risk be diversified away by investing in both Exponent and Booz Allen 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 Exponent and Booz Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exponent and Booz Allen Hamilton, you can compare the effects of market volatilities on Exponent and Booz Allen 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 Exponent with a short position of Booz Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exponent and Booz Allen.
Diversification Opportunities for Exponent and Booz Allen
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Exponent and Booz is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and Booz Allen Hamilton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booz Allen Hamilton and Exponent 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 Exponent are associated (or correlated) with Booz Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booz Allen Hamilton has no effect on the direction of Exponent i.e., Exponent and Booz Allen go up and down completely randomly.
Pair Corralation between Exponent and Booz Allen
Given the investment horizon of 90 days Exponent is expected to under-perform the Booz Allen. But the stock apears to be less risky and, when comparing its historical volatility, Exponent is 1.42 times less risky than Booz Allen. The stock trades about -0.18 of its potential returns per unit of risk. The Booz Allen Hamilton is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 16,272 in Booz Allen Hamilton on August 24, 2024 and sell it today you would lose (1,284) from holding Booz Allen Hamilton or give up 7.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Exponent vs. Booz Allen Hamilton
Performance |
| Timeline |
| Exponent |
| Booz Allen Hamilton |
Exponent and Booz Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exponent and Booz Allen
The main advantage of trading using opposite Exponent and Booz Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exponent position performs unexpectedly, Booz Allen 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 Booz Allen will offset losses from the drop in Booz Allen's long position.| Exponent vs. CRA International | Exponent vs. Huron Consulting Group | Exponent vs. Forrester Research | Exponent vs. Resources Connection |
| Booz Allen vs. Huron Consulting Group | Booz Allen vs. CRA International | Booz Allen vs. Forrester Research | Booz Allen vs. Exponent |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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