Correlation Between FTI Consulting and Booz Allen
Can any of the company-specific risk be diversified away by investing in both FTI Consulting 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 FTI Consulting and Booz Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTI Consulting and Booz Allen Hamilton, you can compare the effects of market volatilities on FTI Consulting 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 FTI Consulting with a short position of Booz Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTI Consulting and Booz Allen.
Diversification Opportunities for FTI Consulting and Booz Allen
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FTI and Booz is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding FTI Consulting 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 FTI Consulting 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 FTI Consulting 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 FTI Consulting i.e., FTI Consulting and Booz Allen go up and down completely randomly.
Pair Corralation between FTI Consulting and Booz Allen
Considering the 90-day investment horizon FTI Consulting is expected to generate 6.03 times less return on investment than Booz Allen. But when comparing it to its historical volatility, FTI Consulting is 1.32 times less risky than Booz Allen. It trades about 0.07 of its potential returns per unit of risk. Booz Allen Hamilton is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 13,111 in Booz Allen Hamilton on October 24, 2024 and sell it today you would earn a total of 1,134 from holding Booz Allen Hamilton or generate 8.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTI Consulting vs. Booz Allen Hamilton
Performance |
| Timeline |
| FTI Consulting |
| Booz Allen Hamilton |
FTI Consulting and Booz Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTI Consulting and Booz Allen
The main advantage of trading using opposite FTI Consulting and Booz Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTI Consulting 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.| FTI Consulting vs. Forrester Research | FTI Consulting vs. Huron Consulting Group | FTI Consulting vs. ICF International | FTI Consulting vs. Franklin Covey |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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