Correlation Between CRA International and Global Digital

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Can any of the company-specific risk be diversified away by investing in both CRA International and Global Digital 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 Global Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRA International and Global Digital Soltn, you can compare the effects of market volatilities on CRA International and Global Digital 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 Global Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and Global Digital.

Diversification Opportunities for CRA International and Global Digital

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between CRA and Global is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and Global Digital Soltn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Digital Soltn 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 Global Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Digital Soltn has no effect on the direction of CRA International i.e., CRA International and Global Digital go up and down completely randomly.

Pair Corralation between CRA International and Global Digital

If you would invest  0.01  in Global Digital Soltn on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Global Digital Soltn or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.24%
ValuesDaily Returns

CRA International  vs.  Global Digital Soltn

 Performance 
       Timeline  
CRA International 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in CRA International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, CRA International demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Global Digital Soltn 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Global Digital Soltn are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Global Digital demonstrated solid returns over the last few months and may actually be approaching a breakup point.

CRA International and Global Digital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CRA International and Global Digital

The main advantage of trading using opposite CRA International and Global Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRA International position performs unexpectedly, Global Digital 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 Global Digital will offset losses from the drop in Global Digital's long position.
The idea behind CRA International and Global Digital Soltn 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.
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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