Correlation Between Exponent and Experian Plc

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

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

Diversification Opportunities for Exponent and Experian Plc

0.17

Correlation Coefficient

Exponent  Experian Plc

Average diversification

The 3 months correlation between Exponent and Experian is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and Experian plc PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Experian plc PK and Exponent 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 Exponent are associated (or correlated) with Experian Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Experian plc PK has no effect on the direction of Exponent i.e., Exponent and Experian Plc go up and down completely randomly.

Pair Corralation between Exponent and Experian Plc

Given the investment horizon of 90 days Exponent is expected to under-perform the Experian Plc. But the stock apears to be less risky and, when comparing its historical volatility, Exponent is 1.18 times less risky than Experian Plc. The stock trades about -0.2 of its potential returns per unit of risk. The Experian plc PK is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,744  in Experian plc PK on December 2, 2024 and sell it today you would earn a total of  5.00  from holding Experian plc PK or generate 0.11% return on investment over 90 days.

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

Exponent  vs.  Experian plc PK

Exponent

Risk-Adjusted Performance

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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Experian plc PK

Risk-Adjusted Performance

Very Weak

Over the last 90 days Experian plc PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Experian Plc is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Exponent and Experian Plc

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

The idea behind Exponent and Experian plc PK 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.