Correlation Between CBIZ and Network 1

Can any of the company-specific risk be diversified away by investing in both CBIZ and Network 1 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 Network 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CBIZ Inc and Network 1 Technologies, you can compare the effects of market volatilities on CBIZ and Network 1 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 Network 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBIZ and Network 1.

Diversification Opportunities for CBIZ and Network 1

-0.55

Correlation Coefficient

CBIZ  Network 1

Excellent diversification

The 3 months correlation between CBIZ and Network is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CBIZ Inc and Network 1 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network 1 Technologies 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 Network 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network 1 Technologies has no effect on the direction of CBIZ i.e., CBIZ and Network 1 go up and down completely randomly.

Pair Corralation between CBIZ and Network 1

Considering the 90-day investment horizon CBIZ Inc is expected to under-perform the Network 1. But the stock apears to be less risky and, when comparing its historical volatility, CBIZ Inc is 1.28 times less risky than Network 1. The stock trades about -0.21 of its potential returns per unit of risk. The Network 1 Technologies is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  206.00  in Network 1 Technologies on January 31, 2024 and sell it today you would lose (8.00) from holding Network 1 Technologies or give up 3.88% of portfolio value over 90 days.

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

CBIZ Inc  vs.  Network 1 Technologies

CBIZ Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CBIZ Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, CBIZ showed solid returns over the last few months and may actually be approaching a breakup point.

Network 1 Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Network 1 Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's forward indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with CBIZ and Network 1

The main advantage of trading using opposite CBIZ and Network 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBIZ position performs unexpectedly, Network 1 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 Network 1 will offset losses from the drop in Network 1's long position.

The idea behind CBIZ Inc and Network 1 Technologies 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.