Correlation Between Exponent and CRA International
Can any of the company-specific risk be diversified away by investing in both Exponent and CRA International 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 CRA International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exponent and CRA International, you can compare the effects of market volatilities on Exponent and CRA International 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 CRA International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exponent and CRA International.
Diversification Opportunities for Exponent and CRA International
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exponent and CRA is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and CRA International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRA International 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 CRA International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRA International has no effect on the direction of Exponent i.e., Exponent and CRA International go up and down completely randomly.
Pair Corralation between Exponent and CRA International
Given the investment horizon of 90 days Exponent is expected to generate 2.23 times less return on investment than CRA International. But when comparing it to its historical volatility, Exponent is 1.3 times less risky than CRA International. It trades about 0.02 of its potential returns per unit of risk. CRA International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 19,231 in CRA International on August 27, 2024 and sell it today you would earn a total of 153.00 from holding CRA International or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exponent vs. CRA International
Performance |
| Timeline |
| Exponent |
| CRA International |
Exponent and CRA International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exponent and CRA International
The main advantage of trading using opposite Exponent and CRA International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exponent position performs unexpectedly, CRA International 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 CRA International will offset losses from the drop in CRA International's long position.| Exponent vs. Franklin Covey | Exponent vs. TransUnion | Exponent vs. ICF International | Exponent vs. Huron Consulting Group |
| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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