Correlation Between Huron Consulting and Stantec
Can any of the company-specific risk be diversified away by investing in both Huron Consulting and Stantec 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 Stantec 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 Stantec, you can compare the effects of market volatilities on Huron Consulting and Stantec 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 Stantec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huron Consulting and Stantec.
Diversification Opportunities for Huron Consulting and Stantec
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Huron and Stantec is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Huron Consulting Group and Stantec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stantec 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 Stantec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stantec has no effect on the direction of Huron Consulting i.e., Huron Consulting and Stantec go up and down completely randomly.
Pair Corralation between Huron Consulting and Stantec
Given the investment horizon of 90 days Huron Consulting Group is expected to generate 1.55 times more return on investment than Stantec. However, Huron Consulting is 1.55 times more volatile than Stantec. It trades about 0.17 of its potential returns per unit of risk. Stantec is currently generating about 0.23 per unit of risk. If you would invest 12,914 in Huron Consulting Group on November 29, 2024 and sell it today you would earn a total of 1,904 from holding Huron Consulting Group or generate 14.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huron Consulting Group vs. Stantec
Performance |
| Timeline |
| Huron Consulting |
| Stantec |
Huron Consulting and Stantec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huron Consulting and Stantec
The main advantage of trading using opposite Huron Consulting and Stantec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huron Consulting position performs unexpectedly, Stantec 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 Stantec will offset losses from the drop in Stantec's long position.| Huron Consulting vs. ICF International | Huron Consulting vs. CRA International | Huron Consulting vs. FTI Consulting | Huron Consulting vs. Heidrick Struggles International |
| Stantec vs. EMCOR Group | Stantec vs. Comfort Systems USA | Stantec vs. Primoris Services | Stantec vs. Granite Construction Incorporated |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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