Correlation Between CRA International and Juniper II

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

By analyzing existing cross correlation between CRA International and Juniper II Corp, you can compare the effects of market volatilities on CRA International and Juniper II 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 Juniper II. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRA International and Juniper II.

Diversification Opportunities for CRA International and Juniper II

-0.43

Correlation Coefficient

CRA International  Juniper II

Very good diversification

The 3 months correlation between CRA and Juniper is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding CRA International and Juniper II Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper II Corp 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 Juniper II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniper II Corp has no effect on the direction of CRA International i.e., CRA International and Juniper II go up and down completely randomly.

Pair Corralation between CRA International and Juniper II

If you would invest  17,488  in CRA International on September 28, 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.  Juniper II Corp

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.

Juniper II Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Juniper II Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Juniper II is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CRA International and Juniper II

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

The idea behind CRA International and Juniper II Corp 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.