Correlation Between CRA International and IsoRay

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

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

Diversification Opportunities for CRA International and IsoRay

-0.47

Correlation Coefficient

CRA International  IsoRay

Very good diversification

The 3 months correlation between CRA and IsoRay is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and IsoRay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IsoRay Inc and CRA International 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 CRA International are associated (or correlated) with IsoRay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IsoRay Inc has no effect on the direction of CRA International i.e., CRA International and IsoRay go up and down completely randomly.

Pair Corralation between CRA International and IsoRay

If you would invest  17,488  in CRA International on September 29, 2024 and sell it today you would earn a total of  1,196  from holding CRA International or generate 6.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

CRA International  vs.  IsoRay Inc

CRA International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CRA International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, CRA International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

IsoRay Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IsoRay Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, IsoRay is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with CRA International and IsoRay

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

The idea behind CRA International and IsoRay 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.