Correlation Between Accel Solutions and SR Accord

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

Diversification Opportunities for Accel Solutions and SR Accord

0.71

Correlation Coefficient

Accel Solutions  SR Accord

Poor diversification

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

Pair Corralation between Accel Solutions and SR Accord

Assuming the 90 days trading horizon Accel Solutions is expected to generate 1.63 times less return on investment than SR Accord. In addition to that, Accel Solutions is 1.05 times more volatile than SR Accord. It trades about 0.21 of its total potential returns per unit of risk. SR Accord is currently generating about 0.36 per unit of volatility. If you would invest  282,435  in SR Accord on September 13, 2024 and sell it today you would earn a total of  138,665  from holding SR Accord or generate 49.1% return on investment over 90 days.

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

Accel Solutions Group  vs.  SR Accord

Accel Solutions Group

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Accel Solutions Group are ranked lower than 16 (%) 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.

SR Accord

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SR Accord are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SR Accord sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Accel Solutions and SR Accord

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

The idea behind Accel Solutions Group and SR Accord 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.