Correlation Between Forrester Research and Booz Allen
Can any of the company-specific risk be diversified away by investing in both Forrester Research and Booz Allen 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 Forrester Research and Booz Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forrester Research and Booz Allen Hamilton, you can compare the effects of market volatilities on Forrester Research and Booz Allen 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 Forrester Research with a short position of Booz Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forrester Research and Booz Allen.
Diversification Opportunities for Forrester Research and Booz Allen
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Forrester and Booz is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Forrester Research and Booz Allen Hamilton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booz Allen Hamilton and Forrester Research 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 Forrester Research are associated (or correlated) with Booz Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booz Allen Hamilton has no effect on the direction of Forrester Research i.e., Forrester Research and Booz Allen go up and down completely randomly.
Pair Corralation between Forrester Research and Booz Allen
Given the investment horizon of 90 days Forrester Research is expected to generate 0.63 times more return on investment than Booz Allen. However, Forrester Research is 1.58 times less risky than Booz Allen. It trades about 0.14 of its potential returns per unit of risk. Booz Allen Hamilton is currently generating about -0.07 per unit of risk. If you would invest 1,556 in Forrester Research on August 24, 2024 and sell it today you would earn a total of 120.00 from holding Forrester Research or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forrester Research vs. Booz Allen Hamilton
Performance |
| Timeline |
| Forrester Research |
| Booz Allen Hamilton |
Forrester Research and Booz Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forrester Research and Booz Allen
The main advantage of trading using opposite Forrester Research and Booz Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forrester Research position performs unexpectedly, Booz Allen 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 Booz Allen will offset losses from the drop in Booz Allen's long position.| Forrester Research vs. Huron Consulting Group | Forrester Research vs. ICF International | Forrester Research vs. Franklin Covey | Forrester Research vs. FTI Consulting |
| Booz Allen vs. Huron Consulting Group | Booz Allen vs. CRA International | Booz Allen vs. Forrester Research | Booz Allen vs. Exponent |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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