Correlation Between Barrett Business and CTPartners Executive

Can any of the company-specific risk be diversified away by investing in both Barrett Business and CTPartners Executive 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 Barrett Business and CTPartners Executive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barrett Business Services and CTPartners Executive Search, you can compare the effects of market volatilities on Barrett Business and CTPartners Executive 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 Barrett Business with a short position of CTPartners Executive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrett Business and CTPartners Executive.

Diversification Opportunities for Barrett Business and CTPartners Executive

-0.73

Correlation Coefficient

Barrett Business  CTPartners Executive

Pay attention - limited upside

The 3 months correlation between Barrett and CTPartners is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Barrett Business Services and CTPartners Executive Search in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTPartners Executive and Barrett Business 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 Barrett Business Services are associated (or correlated) with CTPartners Executive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTPartners Executive has no effect on the direction of Barrett Business i.e., Barrett Business and CTPartners Executive go up and down completely randomly.

Pair Corralation between Barrett Business and CTPartners Executive

If you would invest  0.10  in CTPartners Executive Search on October 10, 2024 and sell it today you would earn a total of  0.00  from holding CTPartners Executive Search or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Barrett Business Services  vs.  CTPartners Executive Search

Barrett Business Services

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Barrett Business Services are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Barrett Business demonstrated solid returns over the last few months and may actually be approaching a breakup point.

CTPartners Executive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTPartners Executive Search has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, CTPartners Executive is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Barrett Business and CTPartners Executive

The main advantage of trading using opposite Barrett Business and CTPartners Executive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrett Business position performs unexpectedly, CTPartners Executive 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 CTPartners Executive will offset losses from the drop in CTPartners Executive's long position.

The idea behind Barrett Business Services and CTPartners Executive Search pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.