Correlation Between Acco Brands and Aeries Technology

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

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

Diversification Opportunities for Acco Brands and Aeries Technology

-0.57

Correlation Coefficient

Acco Brands  Aeries Technology

Excellent diversification

The 3 months correlation between Acco and Aeries is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology and Acco Brands 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 Acco Brands are associated (or correlated) with Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of Acco Brands i.e., Acco Brands and Aeries Technology go up and down completely randomly.

Pair Corralation between Acco Brands and Aeries Technology

Given the investment horizon of 90 days Acco Brands is expected to generate 0.16 times more return on investment than Aeries Technology. However, Acco Brands is 6.34 times less risky than Aeries Technology. It trades about -0.09 of its potential returns per unit of risk. Aeries Technology is currently generating about -0.04 per unit of risk. If you would invest  574.00  in Acco Brands on October 6, 2024 and sell it today you would lose (48.00) from holding Acco Brands or give up 8.36% of portfolio value over 90 days.

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

Acco Brands  vs.  Aeries Technology

Acco Brands

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Acco Brands are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Acco Brands is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Aeries Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aeries Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Acco Brands and Aeries Technology

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

The idea behind Acco Brands and Aeries Technology 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.