Correlation Between Acco Brands and Vita Coco
Can any of the company-specific risk be diversified away by investing in both Acco Brands and Vita Coco 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 Vita Coco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and Vita Coco, you can compare the effects of market volatilities on Acco Brands and Vita Coco 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 Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Vita Coco.
Diversification Opportunities for Acco Brands and Vita Coco
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Acco and Vita is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco 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 Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of Acco Brands i.e., Acco Brands and Vita Coco go up and down completely randomly.
Pair Corralation between Acco Brands and Vita Coco
Given the investment horizon of 90 days Acco Brands is expected to generate 1.34 times more return on investment than Vita Coco. However, Acco Brands is 1.34 times more volatile than Vita Coco. It trades about -0.1 of its potential returns per unit of risk. Vita Coco is currently generating about -0.19 per unit of risk. If you would invest 526.00 in Acco Brands on December 2, 2024 and sell it today you would lose (59.00) from holding Acco Brands or give up 11.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Acco Brands vs. Vita Coco
Performance |
Timeline |
Acco Brands |
Vita Coco |
Acco Brands and Vita Coco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Acco Brands and Vita Coco
The main advantage of trading using opposite Acco Brands and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco's long position.Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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