Correlation Between Accel Solutions and Nextcom

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

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

Diversification Opportunities for Accel Solutions and Nextcom

0.88

Correlation Coefficient

Accel Solutions  Nextcom

Very poor diversification

The 3 months correlation between Accel and Nextcom is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Accel Solutions Group and Nextcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextcom and Accel Solutions 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 Accel Solutions Group are associated (or correlated) with Nextcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextcom has no effect on the direction of Accel Solutions i.e., Accel Solutions and Nextcom go up and down completely randomly.

Pair Corralation between Accel Solutions and Nextcom

Assuming the 90 days trading horizon Accel Solutions is expected to generate 1.01 times less return on investment than Nextcom. In addition to that, Accel Solutions is 1.71 times more volatile than Nextcom. It trades about 0.17 of its total potential returns per unit of risk. Nextcom is currently generating about 0.3 per unit of volatility. If you would invest  68,360  in Nextcom on December 30, 2024 and sell it today you would earn a total of  25,470  from holding Nextcom or generate 37.26% return on investment over 90 days.

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

Accel Solutions Group  vs.  Nextcom

Accel Solutions Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Accel Solutions Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Accel Solutions sustained solid returns over the last few months and may actually be approaching a breakup point.

Nextcom

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nextcom are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nextcom sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Accel Solutions and Nextcom

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

The idea behind Accel Solutions Group and Nextcom 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.