Correlation Between Acco Brands and Hamilton Insurance

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

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

Diversification Opportunities for Acco Brands and Hamilton Insurance

0.34

Correlation Coefficient

Acco Brands  Hamilton Insurance

Weak diversification

The 3 months correlation between Acco and Hamilton is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, 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 Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Acco Brands i.e., Acco Brands and Hamilton Insurance go up and down completely randomly.

Pair Corralation between Acco Brands and Hamilton Insurance

Given the investment horizon of 90 days Acco Brands is expected to under-perform the Hamilton Insurance. In addition to that, Acco Brands is 1.34 times more volatile than Hamilton Insurance Group,. It trades about -0.1 of its total potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.08 per unit of volatility. If you would invest  1,855  in Hamilton Insurance Group, on October 22, 2024 and sell it today you would earn a total of  84.00  from holding Hamilton Insurance Group, or generate 4.53% return on investment over 90 days.

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

Acco Brands  vs.  Hamilton Insurance Group,

Acco Brands

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Acco Brands are ranked lower than 2 (%) 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.

Hamilton Insurance Group,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Hamilton Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Acco Brands and Hamilton Insurance

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

The idea behind Acco Brands and Hamilton Insurance Group, 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.