Correlation Between FTI Consulting and Exponent
Can any of the company-specific risk be diversified away by investing in both FTI Consulting and Exponent 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 Exponent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTI Consulting and Exponent, you can compare the effects of market volatilities on FTI Consulting and Exponent 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 Exponent. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTI Consulting and Exponent.
Diversification Opportunities for FTI Consulting and Exponent
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FTI and Exponent is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding FTI Consulting and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent 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 Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of FTI Consulting i.e., FTI Consulting and Exponent go up and down completely randomly.
Pair Corralation between FTI Consulting and Exponent
Considering the 90-day investment horizon FTI Consulting is expected to generate 0.95 times more return on investment than Exponent. However, FTI Consulting is 1.05 times less risky than Exponent. It trades about 0.03 of its potential returns per unit of risk. Exponent is currently generating about 0.01 per unit of risk. If you would invest 16,518 in FTI Consulting on August 27, 2024 and sell it today you would earn a total of 3,668 from holding FTI Consulting or generate 22.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTI Consulting vs. Exponent
Performance |
| Timeline |
| FTI Consulting |
| Exponent |
FTI Consulting and Exponent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTI Consulting and Exponent
The main advantage of trading using opposite FTI Consulting and Exponent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTI Consulting position performs unexpectedly, Exponent 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 Exponent will offset losses from the drop in Exponent's long position.| FTI Consulting vs. Franklin Covey | FTI Consulting vs. TransUnion | FTI Consulting vs. ICF International | FTI Consulting vs. Huron Consulting Group |
| Exponent vs. Franklin Covey | Exponent vs. TransUnion | Exponent vs. ICF International | Exponent vs. Huron Consulting Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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