Correlation Between SP Plus and CBIZ
Can any of the company-specific risk be diversified away by investing in both SP Plus and CBIZ 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 SP Plus and CBIZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Plus Corp and CBIZ Inc, you can compare the effects of market volatilities on SP Plus and CBIZ 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 SP Plus with a short position of CBIZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Plus and CBIZ.
Diversification Opportunities for SP Plus and CBIZ
Very weak diversification
The 3 months correlation between SP Plus and CBIZ is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SP Plus Corp and CBIZ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBIZ Inc and SP Plus 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 SP Plus Corp are associated (or correlated) with CBIZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBIZ Inc has no effect on the direction of SP Plus i.e., SP Plus and CBIZ go up and down completely randomly.
Pair Corralation between SP Plus and CBIZ
Allowing for the 90-day total investment horizon SP Plus is expected to generate 1.17 times less return on investment than CBIZ. In addition to that, SP Plus is 1.02 times more volatile than CBIZ Inc. It trades about 0.06 of its total potential returns per unit of risk. CBIZ Inc is currently generating about 0.07 per unit of volatility. If you would invest 4,997 in CBIZ Inc on September 2, 2024 and sell it today you would earn a total of 3,261 from holding CBIZ Inc or generate 65.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.05% |
| Values | Daily Returns |
SP Plus Corp vs. CBIZ Inc
Performance |
| Timeline |
| SP Plus Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CBIZ Inc |
SP Plus and CBIZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Plus and CBIZ
The main advantage of trading using opposite SP Plus and CBIZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Plus position performs unexpectedly, CBIZ 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 CBIZ will offset losses from the drop in CBIZ's long position.| SP Plus vs. Cass Information Systems | SP Plus vs. First Advantage Corp | SP Plus vs. Rentokil Initial PLC | SP Plus vs. CBIZ Inc |
| CBIZ vs. CRA International | CBIZ vs. Huron Consulting Group | CBIZ vs. Franklin Covey | CBIZ vs. ICF International |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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