Correlation Between Acco Brands and Enlight Renewable

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

By analyzing existing cross correlation between Acco Brands and Enlight Renewable Energy, you can compare the effects of market volatilities on Acco Brands and Enlight Renewable 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 Enlight Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Enlight Renewable.

Diversification Opportunities for Acco Brands and Enlight Renewable

-0.05

Correlation Coefficient

Acco Brands  Enlight Renewable

Good diversification

The 3 months correlation between Acco and Enlight is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Enlight Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlight Renewable Energy 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 Enlight Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlight Renewable Energy has no effect on the direction of Acco Brands i.e., Acco Brands and Enlight Renewable go up and down completely randomly.

Pair Corralation between Acco Brands and Enlight Renewable

Given the investment horizon of 90 days Acco Brands is expected to under-perform the Enlight Renewable. But the stock apears to be less risky and, when comparing its historical volatility, Acco Brands is 1.31 times less risky than Enlight Renewable. The stock trades about -0.4 of its potential returns per unit of risk. The Enlight Renewable Energy is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,605  in Enlight Renewable Energy on October 6, 2024 and sell it today you would earn a total of  138.00  from holding Enlight Renewable Energy or generate 8.6% return on investment over 90 days.

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

Acco Brands  vs.  Enlight Renewable Energy

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.

Enlight Renewable Energy

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enlight Renewable Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent essential indicators, Enlight Renewable unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acco Brands and Enlight Renewable

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

The idea behind Acco Brands and Enlight Renewable Energy 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.