Correlation Between Hackett and Castellum
Can any of the company-specific risk be diversified away by investing in both Hackett and Castellum 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 Hackett and Castellum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hackett Group and Castellum, you can compare the effects of market volatilities on Hackett and Castellum 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 Hackett with a short position of Castellum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hackett and Castellum.
Diversification Opportunities for Hackett and Castellum
Modest diversification
The 3 months correlation between Hackett and Castellum is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding The Hackett Group and Castellum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellum and Hackett 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 The Hackett Group are associated (or correlated) with Castellum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellum has no effect on the direction of Hackett i.e., Hackett and Castellum go up and down completely randomly.
Pair Corralation between Hackett and Castellum
Given the investment horizon of 90 days The Hackett Group is expected to generate 0.58 times more return on investment than Castellum. However, The Hackett Group is 1.74 times less risky than Castellum. It trades about 0.24 of its potential returns per unit of risk. Castellum is currently generating about 0.0 per unit of risk. If you would invest 2,500 in The Hackett Group on August 24, 2024 and sell it today you would earn a total of 568.00 from holding The Hackett Group or generate 22.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hackett Group vs. Castellum
Performance |
| Timeline |
| Hackett Group |
| Castellum |
Hackett and Castellum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hackett and Castellum
The main advantage of trading using opposite Hackett and Castellum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hackett position performs unexpectedly, Castellum 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 Castellum will offset losses from the drop in Castellum's long position.| Hackett vs. Concentrix | Hackett vs. Accenture plc | Hackett vs. International Business Machines | Hackett vs. Cognizant Technology Solutions |
| Castellum vs. Flint Telecom Group | Castellum vs. Datametrex AI Limited | Castellum vs. TTEC Holdings | Castellum vs. Digatrade Financial Corp |
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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