Correlation Between ARC Document and CBIZ

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

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

Diversification Opportunities for ARC Document and CBIZ

-0.83

Correlation Coefficient

ARC Document  CBIZ

Pay attention - limited upside

The 3 months correlation between ARC and CBIZ is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding ARC Document Solutions and CBIZ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBIZ Inc and ARC Document 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 ARC Document Solutions 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 ARC Document i.e., ARC Document and CBIZ go up and down completely randomly.

Pair Corralation between ARC Document and CBIZ

Considering the 90-day investment horizon ARC Document Solutions is expected to under-perform the CBIZ. In addition to that, ARC Document is 1.02 times more volatile than CBIZ Inc. It trades about -0.02 of its total potential returns per unit of risk. CBIZ Inc is currently generating about 0.02 per unit of volatility. If you would invest  7,782  in CBIZ Inc on January 25, 2024 and sell it today you would earn a total of  25.00  from holding CBIZ Inc or generate 0.32% return on investment over 90 days.

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

ARC Document Solutions  vs.  CBIZ Inc

ARC Document Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARC Document Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

CBIZ Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CBIZ Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental drivers, CBIZ showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ARC Document and CBIZ

The main advantage of trading using opposite ARC Document and CBIZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARC Document 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 ARC Document Solutions 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.