Correlation Between Bowman Consulting and Badger Infrastructure

Can any of the company-specific risk be diversified away by investing in both Bowman Consulting and Badger Infrastructure 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 Bowman Consulting and Badger Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bowman Consulting Group and Badger Infrastructure Solutions, you can compare the effects of market volatilities on Bowman Consulting and Badger Infrastructure 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 Bowman Consulting with a short position of Badger Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowman Consulting and Badger Infrastructure.

Diversification Opportunities for Bowman Consulting and Badger Infrastructure

-0.39

Correlation Coefficient

Bowman Consulting  Badger Infrastructure

Very good diversification

The 3 months correlation between Bowman and Badger is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bowman Consulting Group and Badger Infrastructure Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger Infrastructure and Bowman 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 Bowman Consulting Group are associated (or correlated) with Badger Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger Infrastructure has no effect on the direction of Bowman Consulting i.e., Bowman Consulting and Badger Infrastructure go up and down completely randomly.

Pair Corralation between Bowman Consulting and Badger Infrastructure

Given the investment horizon of 90 days Bowman Consulting Group is expected to under-perform the Badger Infrastructure. In addition to that, Bowman Consulting is 1.71 times more volatile than Badger Infrastructure Solutions. It trades about -0.04 of its total potential returns per unit of risk. Badger Infrastructure Solutions is currently generating about 0.13 per unit of volatility. If you would invest  2,469  in Badger Infrastructure Solutions on December 29, 2024 and sell it today you would earn a total of  338.00  from holding Badger Infrastructure Solutions or generate 13.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.8%
Values	Daily Returns

Bowman Consulting Group  vs.  Badger Infrastructure Solution

Bowman Consulting

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bowman Consulting Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Badger Infrastructure

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Badger Infrastructure Solutions are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Badger Infrastructure reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bowman Consulting and Badger Infrastructure

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

The idea behind Bowman Consulting Group and Badger Infrastructure Solutions 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.