Correlation Between FTI Consulting and CBIZ
Can any of the company-specific risk be diversified away by investing in both FTI Consulting and CBIZ 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 CBIZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTI Consulting and CBIZ Inc, you can compare the effects of market volatilities on FTI Consulting and CBIZ 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 CBIZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTI Consulting and CBIZ.
Diversification Opportunities for FTI Consulting and CBIZ
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FTI and CBIZ is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding FTI Consulting and CBIZ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBIZ Inc 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 CBIZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBIZ Inc has no effect on the direction of FTI Consulting i.e., FTI Consulting and CBIZ go up and down completely randomly.
Pair Corralation between FTI Consulting and CBIZ
Considering the 90-day investment horizon FTI Consulting is expected to generate 1.86 times less return on investment than CBIZ. In addition to that, FTI Consulting is 1.09 times more volatile than CBIZ Inc. It trades about 0.03 of its total potential returns per unit of risk. CBIZ Inc is currently generating about 0.07 per unit of volatility. If you would invest 4,960 in CBIZ Inc on August 30, 2024 and sell it today you would earn a total of 3,340 from holding CBIZ Inc or generate 67.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTI Consulting vs. CBIZ Inc
Performance |
| Timeline |
| FTI Consulting |
| CBIZ Inc |
FTI Consulting and CBIZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTI Consulting and CBIZ
The main advantage of trading using opposite FTI Consulting and CBIZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTI Consulting position performs unexpectedly, CBIZ 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 CBIZ will offset losses from the drop in CBIZ's long position.| FTI Consulting vs. Forrester Research | FTI Consulting vs. Huron Consulting Group | FTI Consulting vs. ICF International | FTI Consulting 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 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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