Correlation Between Accolade and Certara

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

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

Diversification Opportunities for Accolade and Certara

0.37

Correlation Coefficient

Accolade  Certara

Weak diversification

The 3 months correlation between Accolade and Certara is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Accolade and Certara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Certara and Accolade 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 Accolade are associated (or correlated) with Certara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Certara has no effect on the direction of Accolade i.e., Accolade and Certara go up and down completely randomly.

Pair Corralation between Accolade and Certara

Given the investment horizon of 90 days Accolade is expected to generate 4.58 times more return on investment than Certara. However, Accolade is 4.58 times more volatile than Certara. It trades about 0.13 of its potential returns per unit of risk. Certara is currently generating about -0.02 per unit of risk. If you would invest  344.00  in Accolade on December 30, 2024 and sell it today you would earn a total of  355.00  from holding Accolade or generate 103.2% return on investment over 90 days.

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

Accolade  vs.  Certara

Accolade

Risk-Adjusted Performance

OK

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

Certara

Risk-Adjusted Performance

Very Weak

Over the last 90 days Certara has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Certara is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Accolade and Certara

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

The idea behind Accolade and Certara 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.