Correlation Between Dun Bradstreet and Exponent

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

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

Diversification Opportunities for Dun Bradstreet and Exponent

-0.44

Correlation Coefficient

Dun Bradstreet  Exponent

Very good diversification

The 3 months correlation between Dun and Exponent is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dun Bradstreet Holdings and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent and Dun Bradstreet 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 Dun Bradstreet Holdings are associated (or correlated) with Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of Dun Bradstreet i.e., Dun Bradstreet and Exponent go up and down completely randomly.

Pair Corralation between Dun Bradstreet and Exponent

Considering the 90-day investment horizon Dun Bradstreet Holdings is expected to generate 0.88 times more return on investment than Exponent. However, Dun Bradstreet Holdings is 1.13 times less risky than Exponent. It trades about -0.03 of its potential returns per unit of risk. Exponent is currently generating about -0.19 per unit of risk. If you would invest  1,139  in Dun Bradstreet Holdings on October 16, 2024 and sell it today you would lose (41.00) from holding Dun Bradstreet Holdings or give up 3.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Dun Bradstreet Holdings  vs.  Exponent

Dun Bradstreet Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dun Bradstreet Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Dun Bradstreet is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Exponent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exponent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Dun Bradstreet and Exponent

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

The idea behind Dun Bradstreet Holdings and Exponent 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.