Correlation Between Network 1 and CBIZ

Can any of the company-specific risk be diversified away by investing in both Network 1 and CBIZ 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 Network 1 and CBIZ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Network 1 Technologies and CBIZ Inc, you can compare the effects of market volatilities on Network 1 and CBIZ 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 Network 1 with a short position of CBIZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network 1 and CBIZ.

Diversification Opportunities for Network 1 and CBIZ

-0.04

Correlation Coefficient

Network 1  CBIZ

Good diversification

The 3 months correlation between Network and CBIZ is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Network 1 Technologies and CBIZ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBIZ Inc and Network 1 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 Network 1 Technologies are associated (or correlated) with CBIZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBIZ Inc has no effect on the direction of Network 1 i.e., Network 1 and CBIZ go up and down completely randomly.

Pair Corralation between Network 1 and CBIZ

Given the investment horizon of 90 days Network 1 Technologies is expected to generate 1.26 times more return on investment than CBIZ. However, Network 1 is 1.26 times more volatile than CBIZ Inc. It trades about 0.05 of its potential returns per unit of risk. CBIZ Inc is currently generating about -0.09 per unit of risk. If you would invest  126.00  in Network 1 Technologies on December 28, 2024 and sell it today you would earn a total of  6.00  from holding Network 1 Technologies or generate 4.76% return on investment over 90 days.

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

Network 1 Technologies  vs.  CBIZ Inc

Network 1 Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Network 1 Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, Network 1 is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

CBIZ Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBIZ Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Network 1 and CBIZ

The main advantage of trading using opposite Network 1 and CBIZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network 1 position performs unexpectedly, CBIZ 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 CBIZ will offset losses from the drop in CBIZ's long position.

The idea behind Network 1 Technologies and CBIZ Inc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.