Correlation Between FTI Consulting and Experian Plc
Can any of the company-specific risk be diversified away by investing in both FTI Consulting and Experian Plc 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 Experian Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTI Consulting and Experian plc PK, you can compare the effects of market volatilities on FTI Consulting and Experian Plc 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 Experian Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTI Consulting and Experian Plc.
Diversification Opportunities for FTI Consulting and Experian Plc
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FTI and Experian is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding FTI Consulting and Experian plc PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Experian plc PK 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 Experian Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Experian plc PK has no effect on the direction of FTI Consulting i.e., FTI Consulting and Experian Plc go up and down completely randomly.
Pair Corralation between FTI Consulting and Experian Plc
Considering the 90-day investment horizon FTI Consulting is expected to generate 0.73 times more return on investment than Experian Plc. However, FTI Consulting is 1.37 times less risky than Experian Plc. It trades about 0.11 of its potential returns per unit of risk. Experian plc PK is currently generating about -0.1 per unit of risk. If you would invest 19,829 in FTI Consulting on August 28, 2024 and sell it today you would earn a total of 551.00 from holding FTI Consulting or generate 2.78% 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. Experian plc PK
Performance |
| Timeline |
| FTI Consulting |
| Experian plc PK |
FTI Consulting and Experian Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTI Consulting and Experian Plc
The main advantage of trading using opposite FTI Consulting and Experian Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTI Consulting position performs unexpectedly, Experian Plc 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 Experian Plc will offset losses from the drop in Experian Plc's long position.| FTI Consulting vs. Franklin Covey | FTI Consulting vs. TransUnion | FTI Consulting vs. ICF International | FTI Consulting vs. Huron Consulting Group |
| Experian Plc vs. Sack Lunch Productions | Experian Plc vs. Potash America | Experian Plc vs. Dalrada Financial Corp | Experian Plc vs. TransUnion |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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