Correlation Between Robert Half and Exponent

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

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

Diversification Opportunities for Robert Half and Exponent

-0.67

Correlation Coefficient

Robert Half  Exponent

Excellent diversification

The 3 months correlation between Robert and Exponent is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Robert Half International and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent and Robert Half 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 Robert Half International are associated (or correlated) with Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of Robert Half i.e., Robert Half and Exponent go up and down completely randomly.

Pair Corralation between Robert Half and Exponent

Considering the 90-day investment horizon Robert Half International is expected to under-perform the Exponent. But the stock apears to be less risky and, when comparing its historical volatility, Robert Half International is 1.05 times less risky than Exponent. The stock trades about -0.31 of its potential returns per unit of risk. The Exponent is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9,320  in Exponent on February 28, 2024 and sell it today you would earn a total of  151.00  from holding Exponent or generate 1.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Robert Half International  vs.  Exponent

Robert Half International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Robert Half International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Exponent

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exponent are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Exponent displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Robert Half and Exponent

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

The idea behind Robert Half International and Exponent 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.