Correlation Between Cross Country and Robert Half

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

By analyzing existing cross correlation between Cross Country Healthcare and Robert Half International, you can compare the effects of market volatilities on Cross Country and Robert Half 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 Cross Country with a short position of Robert Half. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cross Country and Robert Half.

Diversification Opportunities for Cross Country and Robert Half

0.82

Correlation Coefficient

Cross Country  Robert Half

Very poor diversification

The 3 months correlation between Cross and Robert is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cross Country Healthcare and Robert Half International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robert Half International and Cross Country 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 Cross Country Healthcare are associated (or correlated) with Robert Half. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robert Half International has no effect on the direction of Cross Country i.e., Cross Country and Robert Half go up and down completely randomly.

Pair Corralation between Cross Country and Robert Half

Assuming the 90 days horizon Cross Country Healthcare is expected to generate 0.74 times more return on investment than Robert Half. However, Cross Country Healthcare is 1.34 times less risky than Robert Half. It trades about -0.23 of its potential returns per unit of risk. Robert Half International is currently generating about -0.25 per unit of risk. If you would invest  1,710  in Cross Country Healthcare on December 28, 2024 and sell it today you would lose (330.00) from holding Cross Country Healthcare or give up 19.3% of portfolio value over 90 days.

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

Cross Country Healthcare  vs.  Robert Half International

Cross Country Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cross Country Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Robert Half International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Robert Half International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cross Country and Robert Half

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

The idea behind Cross Country Healthcare and Robert Half International 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.