Correlation Between Huron Consulting and Amentum Holdings
Can any of the company-specific risk be diversified away by investing in both Huron Consulting and Amentum Holdings 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 Huron Consulting and Amentum Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huron Consulting Group and Amentum Holdings, you can compare the effects of market volatilities on Huron Consulting and Amentum Holdings 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 Huron Consulting with a short position of Amentum Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huron Consulting and Amentum Holdings.
Diversification Opportunities for Huron Consulting and Amentum Holdings
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Huron and Amentum is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Huron Consulting Group and Amentum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amentum Holdings and Huron 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 Huron Consulting Group are associated (or correlated) with Amentum Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amentum Holdings has no effect on the direction of Huron Consulting i.e., Huron Consulting and Amentum Holdings go up and down completely randomly.
Pair Corralation between Huron Consulting and Amentum Holdings
Given the investment horizon of 90 days Huron Consulting Group is expected to generate 0.35 times more return on investment than Amentum Holdings. However, Huron Consulting Group is 2.88 times less risky than Amentum Holdings. It trades about 0.06 of its potential returns per unit of risk. Amentum Holdings is currently generating about -0.04 per unit of risk. If you would invest 7,419 in Huron Consulting Group on September 3, 2024 and sell it today you would earn a total of 4,862 from holding Huron Consulting Group or generate 65.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 9.9% |
| Values | Daily Returns |
Huron Consulting Group vs. Amentum Holdings
Performance |
| Timeline |
| Huron Consulting |
| Amentum Holdings |
Huron Consulting and Amentum Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huron Consulting and Amentum Holdings
The main advantage of trading using opposite Huron Consulting and Amentum Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huron Consulting position performs unexpectedly, Amentum Holdings 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 Amentum Holdings will offset losses from the drop in Amentum Holdings' long position.| Huron Consulting vs. ICF International | Huron Consulting vs. CRA International | Huron Consulting vs. FTI Consulting | Huron Consulting vs. Heidrick Struggles International |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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