Correlation Between AmerisourceBergen and Accolade

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

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

Diversification Opportunities for AmerisourceBergen and Accolade

-0.71

Correlation Coefficient

AmerisourceBergen  Accolade

Pay attention - limited upside

The 3 months correlation between AmerisourceBergen and Accolade is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding AmerisourceBergen and Accolade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accolade and AmerisourceBergen 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 AmerisourceBergen are associated (or correlated) with Accolade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accolade has no effect on the direction of AmerisourceBergen i.e., AmerisourceBergen and Accolade go up and down completely randomly.

Pair Corralation between AmerisourceBergen and Accolade

If you would invest  19,145  in AmerisourceBergen on September 2, 2024 and sell it today you would earn a total of  0.00  from holding AmerisourceBergen or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

AmerisourceBergen  vs.  Accolade

AmerisourceBergen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AmerisourceBergen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, AmerisourceBergen is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Accolade

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accolade has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with AmerisourceBergen and Accolade

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

The idea behind AmerisourceBergen and Accolade 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.