Correlation Between FTI Consulting and UL Solutions
Can any of the company-specific risk be diversified away by investing in both FTI Consulting and UL Solutions 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 UL Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTI Consulting and UL Solutions, you can compare the effects of market volatilities on FTI Consulting and UL Solutions 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 UL Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTI Consulting and UL Solutions.
Diversification Opportunities for FTI Consulting and UL Solutions
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between FTI and ULS is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding FTI Consulting and UL Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UL Solutions 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 UL Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UL Solutions has no effect on the direction of FTI Consulting i.e., FTI Consulting and UL Solutions go up and down completely randomly.
Pair Corralation between FTI Consulting and UL Solutions
Considering the 90-day investment horizon FTI Consulting is expected to under-perform the UL Solutions. In addition to that, FTI Consulting is 2.04 times more volatile than UL Solutions. It trades about -0.23 of its total potential returns per unit of risk. UL Solutions is currently generating about -0.03 per unit of volatility. If you would invest 5,378 in UL Solutions on December 2, 2024 and sell it today you would lose (59.00) from holding UL Solutions or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTI Consulting vs. UL Solutions
Performance |
| Timeline |
| FTI Consulting |
| UL Solutions |
FTI Consulting and UL Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTI Consulting and UL Solutions
The main advantage of trading using opposite FTI Consulting and UL Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTI Consulting position performs unexpectedly, UL Solutions 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 UL Solutions will offset losses from the drop in UL Solutions' long position.| FTI Consulting vs. Forrester Research | FTI Consulting vs. Huron Consulting Group | FTI Consulting vs. ICF International | FTI Consulting vs. Franklin Covey |
| UL Solutions vs. Q2 Holdings | UL Solutions vs. Olympic Steel | UL Solutions vs. Coinbase Global | UL Solutions vs. Griffon |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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