Correlation Between CBIZ and Quad Graphics

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

By analyzing existing cross correlation between CBIZ Inc and Quad Graphics, you can compare the effects of market volatilities on CBIZ and Quad Graphics 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 Quad Graphics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBIZ and Quad Graphics.

Diversification Opportunities for CBIZ and Quad Graphics

0.91

Correlation Coefficient

CBIZ  Quad Graphics

Almost no diversification

The 3 months correlation between CBIZ and Quad is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CBIZ Inc and Quad Graphics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quad Graphics 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 Quad Graphics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quad Graphics has no effect on the direction of CBIZ i.e., CBIZ and Quad Graphics go up and down completely randomly.

Pair Corralation between CBIZ and Quad Graphics

Considering the 90-day investment horizon CBIZ is expected to generate 2.43 times less return on investment than Quad Graphics. But when comparing it to its historical volatility, CBIZ Inc is 2.2 times less risky than Quad Graphics. It trades about 0.19 of its potential returns per unit of risk. Quad Graphics is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  460.00  in Quad Graphics on September 27, 2024 and sell it today you would earn a total of  283.00  from holding Quad Graphics or generate 61.52% return on investment over 90 days.

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

CBIZ Inc  vs.  Quad Graphics

CBIZ Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CBIZ Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental drivers, CBIZ showed solid returns over the last few months and may actually be approaching a breakup point.

Quad Graphics

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quad Graphics are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Quad Graphics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CBIZ and Quad Graphics

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

The idea behind CBIZ Inc and Quad Graphics 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.