Correlation Between Huron Consulting and Booz Allen
Can any of the company-specific risk be diversified away by investing in both Huron Consulting 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 Huron Consulting and Booz Allen 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 Booz Allen Hamilton, you can compare the effects of market volatilities on Huron Consulting 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 Huron Consulting with a short position of Booz Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huron Consulting and Booz Allen.
Diversification Opportunities for Huron Consulting and Booz Allen
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Huron and Booz is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Huron Consulting Group 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 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 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 Huron Consulting i.e., Huron Consulting and Booz Allen go up and down completely randomly.
Pair Corralation between Huron Consulting and Booz Allen
Given the investment horizon of 90 days Huron Consulting Group is expected to generate 0.88 times more return on investment than Booz Allen. However, Huron Consulting Group is 1.14 times less risky than Booz Allen. It trades about 0.31 of its potential returns per unit of risk. Booz Allen Hamilton is currently generating about -0.3 per unit of risk. If you would invest 10,414 in Huron Consulting Group on August 27, 2024 and sell it today you would earn a total of 2,146 from holding Huron Consulting Group or generate 20.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huron Consulting Group vs. Booz Allen Hamilton
Performance |
| Timeline |
| Huron Consulting |
| Booz Allen Hamilton |
Huron Consulting and Booz Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huron Consulting and Booz Allen
The main advantage of trading using opposite Huron Consulting and Booz Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huron Consulting 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.| Huron Consulting vs. ICF International | Huron Consulting vs. CRA International | Huron Consulting vs. FTI Consulting | Huron Consulting vs. Heidrick Struggles International |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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