Correlation Between Exponent and Willdan
Can any of the company-specific risk be diversified away by investing in both Exponent and Willdan 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 Willdan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exponent and Willdan Group, you can compare the effects of market volatilities on Exponent and Willdan 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 Willdan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exponent and Willdan.
Diversification Opportunities for Exponent and Willdan
Average diversification
The 3 months correlation between Exponent and Willdan is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and Willdan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willdan Group 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 Willdan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willdan Group has no effect on the direction of Exponent i.e., Exponent and Willdan go up and down completely randomly.
Pair Corralation between Exponent and Willdan
Given the investment horizon of 90 days Exponent is expected to under-perform the Willdan. But the stock apears to be less risky and, when comparing its historical volatility, Exponent is 3.39 times less risky than Willdan. The stock trades about -0.15 of its potential returns per unit of risk. The Willdan Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,847 in Willdan Group on December 22, 2024 and sell it today you would earn a total of 349.00 from holding Willdan Group or generate 9.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Exponent vs. Willdan Group
Performance |
Timeline |
Exponent |
Willdan Group |
Exponent and Willdan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Exponent and Willdan
The main advantage of trading using opposite Exponent and Willdan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exponent position performs unexpectedly, Willdan 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 Willdan will offset losses from the drop in Willdan's long position.Exponent vs. CRA International | Exponent vs. Huron Consulting Group | Exponent vs. Forrester Research | Exponent vs. Resources Connection |
Willdan vs. SNC Lavalin Group | Willdan vs. WSP Global | Willdan vs. Comfort Systems USA | Willdan vs. MYR Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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