Correlation Between ACCSYS TECHPLC and ACCO Brands

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

By analyzing existing cross correlation between ACCSYS TECHPLC EO and ACCO Brands, you can compare the effects of market volatilities on ACCSYS TECHPLC and ACCO Brands 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 ACCSYS TECHPLC with a short position of ACCO Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACCSYS TECHPLC and ACCO Brands.

Diversification Opportunities for ACCSYS TECHPLC and ACCO Brands

-0.55

Correlation Coefficient

ACCSYS TECHPLC  ACCO Brands

Excellent diversification

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

Pair Corralation between ACCSYS TECHPLC and ACCO Brands

Assuming the 90 days horizon ACCSYS TECHPLC EO is expected to generate 1.05 times more return on investment than ACCO Brands. However, ACCSYS TECHPLC is 1.05 times more volatile than ACCO Brands. It trades about -0.11 of its potential returns per unit of risk. ACCO Brands is currently generating about -0.57 per unit of risk. If you would invest  54.00  in ACCSYS TECHPLC EO on October 6, 2024 and sell it today you would lose (2.00) from holding ACCSYS TECHPLC EO or give up 3.7% of portfolio value over 90 days.

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

ACCSYS TECHPLC EO  vs.  ACCO Brands

ACCSYS TECHPLC EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACCSYS TECHPLC EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ACCSYS TECHPLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ACCO Brands

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with ACCSYS TECHPLC and ACCO Brands

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

The idea behind ACCSYS TECHPLC EO and ACCO Brands 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .