Correlation Between Exponent and Stantec
Can any of the company-specific risk be diversified away by investing in both Exponent and Stantec 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 Stantec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exponent and Stantec, you can compare the effects of market volatilities on Exponent and Stantec 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 Stantec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exponent and Stantec.
Diversification Opportunities for Exponent and Stantec
Poor diversification
The 3 months correlation between Exponent and Stantec is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and Stantec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stantec 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 Stantec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stantec has no effect on the direction of Exponent i.e., Exponent and Stantec go up and down completely randomly.
Pair Corralation between Exponent and Stantec
Given the investment horizon of 90 days Exponent is expected to generate 0.88 times more return on investment than Stantec. However, Exponent is 1.14 times less risky than Stantec. It trades about 0.18 of its potential returns per unit of risk. Stantec is currently generating about -0.05 per unit of risk. If you would invest 8,792 in Exponent on November 2, 2024 and sell it today you would earn a total of 375.00 from holding Exponent or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exponent vs. Stantec
Performance |
| Timeline |
| Exponent |
| Stantec |
Exponent and Stantec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exponent and Stantec
The main advantage of trading using opposite Exponent and Stantec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exponent position performs unexpectedly, Stantec 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 Stantec will offset losses from the drop in Stantec's long position.| Exponent vs. CRA International | Exponent vs. Huron Consulting Group | Exponent vs. Forrester Research | Exponent vs. Resources Connection |
| Stantec vs. EMCOR Group | Stantec vs. Comfort Systems USA | Stantec vs. Primoris Services | Stantec vs. Granite Construction Incorporated |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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