Correlation Between Fair Isaac and Corporate Travel

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

By analyzing existing cross correlation between Fair Isaac Corp and Corporate Travel Management, you can compare the effects of market volatilities on Fair Isaac and Corporate Travel 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 Fair Isaac with a short position of Corporate Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Isaac and Corporate Travel.

Diversification Opportunities for Fair Isaac and Corporate Travel

-0.51

Correlation Coefficient

Fair Isaac  Corporate Travel

Excellent diversification

The 3 months correlation between Fair and Corporate is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Fair Isaac Corp and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man and Fair Isaac 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 Fair Isaac Corp are associated (or correlated) with Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of Fair Isaac i.e., Fair Isaac and Corporate Travel go up and down completely randomly.

Pair Corralation between Fair Isaac and Corporate Travel

Assuming the 90 days trading horizon Fair Isaac Corp is expected to under-perform the Corporate Travel. But the stock apears to be less risky and, when comparing its historical volatility, Fair Isaac Corp is 1.03 times less risky than Corporate Travel. The stock trades about -0.1 of its potential returns per unit of risk. The Corporate Travel Management is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  760.00  in Corporate Travel Management on December 22, 2024 and sell it today you would earn a total of  30.00  from holding Corporate Travel Management or generate 3.95% return on investment over 90 days.

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

Fair Isaac Corp  vs.  Corporate Travel Management

Fair Isaac Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fair Isaac Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Corporate Travel Man

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Corporate Travel Management are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Corporate Travel is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fair Isaac and Corporate Travel

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

The idea behind Fair Isaac Corp and Corporate Travel Management 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.