Correlation Between Verisk Analytics and Exponent
Can any of the company-specific risk be diversified away by investing in both Verisk Analytics and Exponent 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 Verisk Analytics and Exponent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verisk Analytics and Exponent, you can compare the effects of market volatilities on Verisk Analytics and Exponent 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 Verisk Analytics with a short position of Exponent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verisk Analytics and Exponent.
Diversification Opportunities for Verisk Analytics and Exponent
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Verisk and Exponent is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Verisk Analytics and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent and Verisk Analytics 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 Verisk Analytics are associated (or correlated) with Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of Verisk Analytics i.e., Verisk Analytics and Exponent go up and down completely randomly.
Pair Corralation between Verisk Analytics and Exponent
Given the investment horizon of 90 days Verisk Analytics is expected to under-perform the Exponent. But the stock apears to be less risky and, when comparing its historical volatility, Verisk Analytics is 1.62 times less risky than Exponent. The stock trades about -0.22 of its potential returns per unit of risk. The Exponent is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,985 in Exponent on January 26, 2024 and sell it today you would earn a total of 75.00 from holding Exponent or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verisk Analytics vs. Exponent
Performance |
| Timeline |
| Verisk Analytics |
| Exponent |
Verisk Analytics and Exponent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verisk Analytics and Exponent
The main advantage of trading using opposite Verisk Analytics and Exponent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verisk Analytics position performs unexpectedly, Exponent 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 Exponent will offset losses from the drop in Exponent's long position.| Verisk Analytics vs. CRA International | Verisk Analytics vs. Thermon Group Holdings | Verisk Analytics vs. Forestar Group | Verisk Analytics vs. Alamo Group |
| Exponent vs. CRA International | Exponent vs. Huron Consulting Group | Exponent vs. Forrester Research | Exponent vs. Resources Connection |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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