Correlation Between CRA International and Forrester Research

Can any of the company-specific risk be diversified away by investing in both CRA International and Forrester Research 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 CRA International and Forrester Research into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CRA International and Forrester Research, you can compare the effects of market volatilities on CRA International and Forrester Research 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 CRA International with a short position of Forrester Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and Forrester Research.

Diversification Opportunities for CRA International and Forrester Research

0.37

Correlation Coefficient

CRA International  Forrester Research

Weak diversification

The 3 months correlation between CRA and Forrester is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and Forrester Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forrester Research and CRA International 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 CRA International are associated (or correlated) with Forrester Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forrester Research has no effect on the direction of CRA International i.e., CRA International and Forrester Research go up and down completely randomly.

Pair Corralation between CRA International and Forrester Research

Given the investment horizon of 90 days CRA International is expected to generate 0.91 times more return on investment than Forrester Research. However, CRA International is 1.1 times less risky than Forrester Research. It trades about 0.03 of its potential returns per unit of risk. Forrester Research is currently generating about -0.17 per unit of risk. If you would invest  19,213  in CRA International on November 20, 2024 and sell it today you would earn a total of  443.00  from holding CRA International or generate 2.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CRA International  vs.  Forrester Research

CRA International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CRA International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, CRA International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Forrester Research

Risk-Adjusted Performance

Very Weak

Over the last 90 days Forrester Research has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with CRA International and Forrester Research

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

The idea behind CRA International and Forrester Research 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.