Correlation Between FTI Consulting and Concentrix
Can any of the company-specific risk be diversified away by investing in both FTI Consulting and Concentrix 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 Concentrix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTI Consulting and Concentrix, you can compare the effects of market volatilities on FTI Consulting and Concentrix 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 Concentrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTI Consulting and Concentrix.
Diversification Opportunities for FTI Consulting and Concentrix
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FTI and Concentrix is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding FTI Consulting and Concentrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concentrix 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 Concentrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concentrix has no effect on the direction of FTI Consulting i.e., FTI Consulting and Concentrix go up and down completely randomly.
Pair Corralation between FTI Consulting and Concentrix
Considering the 90-day investment horizon FTI Consulting is expected to generate 0.72 times more return on investment than Concentrix. However, FTI Consulting is 1.38 times less risky than Concentrix. It trades about 0.02 of its potential returns per unit of risk. Concentrix is currently generating about -0.04 per unit of risk. If you would invest 19,119 in FTI Consulting on August 31, 2024 and sell it today you would earn a total of 1,133 from holding FTI Consulting or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTI Consulting vs. Concentrix
Performance |
| Timeline |
| FTI Consulting |
| Concentrix |
FTI Consulting and Concentrix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTI Consulting and Concentrix
The main advantage of trading using opposite FTI Consulting and Concentrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTI Consulting position performs unexpectedly, Concentrix 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 Concentrix will offset losses from the drop in Concentrix's long position.| FTI Consulting vs. CRA International | FTI Consulting vs. Huron Consulting Group | FTI Consulting vs. Forrester Research | FTI Consulting vs. Exponent |
| Concentrix vs. Genpact Limited | Concentrix vs. ExlService Holdings | Concentrix vs. Science Applications International | Concentrix vs. CLARIVATE PLC |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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