Correlation Between Hackett and IBEX
Can any of the company-specific risk be diversified away by investing in both Hackett and IBEX 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 IBEX 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 IBEX, you can compare the effects of market volatilities on Hackett and IBEX 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 IBEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hackett and IBEX.
Diversification Opportunities for Hackett and IBEX
Very weak diversification
The 3 months correlation between Hackett and IBEX is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding The Hackett Group and IBEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX 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 IBEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX has no effect on the direction of Hackett i.e., Hackett and IBEX go up and down completely randomly.
Pair Corralation between Hackett and IBEX
Given the investment horizon of 90 days The Hackett Group is expected to generate 1.83 times more return on investment than IBEX. However, Hackett is 1.83 times more volatile than IBEX. It trades about 0.28 of its potential returns per unit of risk. IBEX is currently generating about 0.27 per unit of risk. If you would invest 2,470 in The Hackett Group on August 28, 2024 and sell it today you would earn a total of 650.00 from holding The Hackett Group or generate 26.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Hackett Group vs. IBEX
Performance |
| Timeline |
| Hackett Group |
| IBEX |
Hackett and IBEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hackett and IBEX
The main advantage of trading using opposite Hackett and IBEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hackett position performs unexpectedly, IBEX 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 IBEX will offset losses from the drop in IBEX's long position.| Hackett vs. Data Storage Corp | Hackett vs. Usio Inc | Hackett vs. ARB IOT Group | Hackett vs. FiscalNote Holdings |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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