Correlation Between Exponent and Verisk Analytics
Can any of the company-specific risk be diversified away by investing in both Exponent and Verisk Analytics 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 Verisk Analytics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exponent and Verisk Analytics, you can compare the effects of market volatilities on Exponent and Verisk Analytics 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 Verisk Analytics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exponent and Verisk Analytics.
Diversification Opportunities for Exponent and Verisk Analytics
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Exponent and Verisk is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and Verisk Analytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verisk Analytics 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 Verisk Analytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verisk Analytics has no effect on the direction of Exponent i.e., Exponent and Verisk Analytics go up and down completely randomly.
Pair Corralation between Exponent and Verisk Analytics
Given the investment horizon of 90 days Exponent is expected to generate 1.32 times less return on investment than Verisk Analytics. But when comparing it to its historical volatility, Exponent is 1.33 times less risky than Verisk Analytics. It trades about 0.14 of its potential returns per unit of risk. Verisk Analytics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 27,628 in Verisk Analytics on November 4, 2024 and sell it today you would earn a total of 1,116 from holding Verisk Analytics or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exponent vs. Verisk Analytics
Performance |
| Timeline |
| Exponent |
| Verisk Analytics |
Exponent and Verisk Analytics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exponent and Verisk Analytics
The main advantage of trading using opposite Exponent and Verisk Analytics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exponent position performs unexpectedly, Verisk Analytics 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 Verisk Analytics will offset losses from the drop in Verisk Analytics' long position.| Exponent vs. CRA International | Exponent vs. Huron Consulting Group | Exponent vs. Forrester Research | Exponent vs. Resources Connection |
| Verisk Analytics vs. Equifax | Verisk Analytics vs. Exponent | Verisk Analytics vs. FTI Consulting | Verisk Analytics vs. Franklin Covey |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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