Correlation Between Hackett and Information Services
Can any of the company-specific risk be diversified away by investing in both Hackett and Information Services 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 Information Services 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 Information Services Group, you can compare the effects of market volatilities on Hackett and Information Services 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 Information Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hackett and Information Services.
Diversification Opportunities for Hackett and Information Services
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hackett and Information is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding The Hackett Group and Information Services Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services 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 Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of Hackett i.e., Hackett and Information Services go up and down completely randomly.
Pair Corralation between Hackett and Information Services
Given the investment horizon of 90 days The Hackett Group is expected to generate 2.12 times more return on investment than Information Services. However, Hackett is 2.12 times more volatile than Information Services Group. It trades about 0.24 of its potential returns per unit of risk. Information Services Group is currently generating about 0.2 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hackett Group vs. Information Services Group
Performance |
| Timeline |
| Hackett Group |
| Information Services |
Hackett and Information Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hackett and Information Services
The main advantage of trading using opposite Hackett and Information Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hackett position performs unexpectedly, Information Services 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 Information Services will offset losses from the drop in Information Services' long position.| Hackett vs. Concentrix | Hackett vs. Accenture plc | Hackett vs. International Business Machines | Hackett vs. Cognizant Technology Solutions |
| Information Services vs. Formula Systems 1985 | Information Services vs. CSP Inc | Information Services vs. Nayax | Information Services vs. The Hackett 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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