Correlation Between CBIZ and ARC Document

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Can any of the company-specific risk be diversified away by investing in both CBIZ and ARC Document 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 CBIZ and ARC Document into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBIZ Inc and ARC Document Solutions, you can compare the effects of market volatilities on CBIZ and ARC Document 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 CBIZ with a short position of ARC Document. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBIZ and ARC Document.

Diversification Opportunities for CBIZ and ARC Document

-0.86
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CBIZ and ARC is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding CBIZ Inc and ARC Document Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARC Document Solutions and CBIZ 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 CBIZ Inc are associated (or correlated) with ARC Document. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARC Document Solutions has no effect on the direction of CBIZ i.e., CBIZ and ARC Document go up and down completely randomly.

Pair Corralation between CBIZ and ARC Document

Considering the 90-day investment horizon CBIZ Inc is expected to generate 0.84 times more return on investment than ARC Document. However, CBIZ Inc is 1.2 times less risky than ARC Document. It trades about 0.09 of its potential returns per unit of risk. ARC Document Solutions is currently generating about 0.06 per unit of risk. If you would invest  7,622  in CBIZ Inc on December 29, 2023 and sell it today you would earn a total of  183.00  from holding CBIZ Inc or generate 2.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

CBIZ Inc  vs.  ARC Document Solutions

 Performance 
       Timeline  
CBIZ Inc 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in CBIZ Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, CBIZ showed solid returns over the last few months and may actually be approaching a breakup point.
ARC Document Solutions 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CBIZ and ARC Document Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CBIZ and ARC Document

The main advantage of trading using opposite CBIZ and ARC Document positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBIZ position performs unexpectedly, ARC Document 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 ARC Document will offset losses from the drop in ARC Document's long position.
The idea behind CBIZ Inc and ARC Document Solutions 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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