Correlation Between ACCSYS TECHPLC and PENN NATL

Can any of the company-specific risk be diversified away by investing in both ACCSYS TECHPLC and PENN NATL 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 PENN NATL 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 PENN NATL GAMING, you can compare the effects of market volatilities on ACCSYS TECHPLC and PENN NATL 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 PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACCSYS TECHPLC and PENN NATL.

Diversification Opportunities for ACCSYS TECHPLC and PENN NATL

-0.51

Correlation Coefficient

ACCSYS TECHPLC  PENN NATL

Excellent diversification

The 3 months correlation between ACCSYS and PENN is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ACCSYS TECHPLC EO and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING 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 PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of ACCSYS TECHPLC i.e., ACCSYS TECHPLC and PENN NATL go up and down completely randomly.

Pair Corralation between ACCSYS TECHPLC and PENN NATL

Assuming the 90 days horizon ACCSYS TECHPLC EO is expected to generate 0.55 times more return on investment than PENN NATL. However, ACCSYS TECHPLC EO is 1.82 times less risky than PENN NATL. It trades about -0.05 of its potential returns per unit of risk. PENN NATL GAMING is currently generating about -0.04 per unit of risk. If you would invest  54.00  in ACCSYS TECHPLC EO on October 10, 2024 and sell it today you would lose (1.00) from holding ACCSYS TECHPLC EO or give up 1.85% 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.  PENN NATL GAMING

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.

PENN NATL GAMING

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PENN NATL GAMING are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, PENN NATL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ACCSYS TECHPLC and PENN NATL

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

The idea behind ACCSYS TECHPLC EO and PENN NATL GAMING 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.