Correlation Between Barrett Business and GEE
Can any of the company-specific risk be diversified away by investing in both Barrett Business and GEE 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 Barrett Business and GEE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barrett Business Services and GEE Group, you can compare the effects of market volatilities on Barrett Business and GEE 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 Barrett Business with a short position of GEE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrett Business and GEE.
Diversification Opportunities for Barrett Business and GEE
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barrett and GEE is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Barrett Business Services and GEE Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEE Group and Barrett Business 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 Barrett Business Services are associated (or correlated) with GEE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEE Group has no effect on the direction of Barrett Business i.e., Barrett Business and GEE go up and down completely randomly.
Pair Corralation between Barrett Business and GEE
Given the investment horizon of 90 days Barrett Business Services is expected to generate 0.56 times more return on investment than GEE. However, Barrett Business Services is 1.78 times less risky than GEE. It trades about 0.18 of its potential returns per unit of risk. GEE Group is currently generating about -0.14 per unit of risk. If you would invest 8,802 in Barrett Business Services on January 20, 2024 and sell it today you would earn a total of 3,334 from holding Barrett Business Services or generate 37.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrett Business Services vs. GEE Group
Performance |
| Timeline |
| Barrett Business Services |
| GEE Group |
Barrett Business and GEE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrett Business and GEE
The main advantage of trading using opposite Barrett Business and GEE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrett Business position performs unexpectedly, GEE 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 GEE will offset losses from the drop in GEE's long position.| Barrett Business vs. ExlService Holdings | Barrett Business vs. WNS Holdings | Barrett Business vs. Gartner | Barrett Business vs. The Hackett Group |
Check out your portfolio center.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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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