Correlation Between Acco Brands and Mach Natural
Can any of the company-specific risk be diversified away by investing in both Acco Brands and Mach Natural 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 Mach Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and Mach Natural Resources, you can compare the effects of market volatilities on Acco Brands and Mach Natural 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 Mach Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Mach Natural.
Diversification Opportunities for Acco Brands and Mach Natural
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acco and Mach is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Mach Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mach Natural Resources 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 Mach Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mach Natural Resources has no effect on the direction of Acco Brands i.e., Acco Brands and Mach Natural go up and down completely randomly.
Pair Corralation between Acco Brands and Mach Natural
Given the investment horizon of 90 days Acco Brands is expected to generate 1.38 times more return on investment than Mach Natural. However, Acco Brands is 1.38 times more volatile than Mach Natural Resources. It trades about 0.01 of its potential returns per unit of risk. Mach Natural Resources is currently generating about 0.01 per unit of risk. If you would invest 458.00 in Acco Brands on December 2, 2024 and sell it today you would earn a total of 9.00 from holding Acco Brands or generate 1.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 68.28% |
Values | Daily Returns |
Acco Brands vs. Mach Natural Resources
Performance |
Timeline |
Acco Brands |
Mach Natural Resources |
Acco Brands and Mach Natural Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Acco Brands and Mach Natural
The main advantage of trading using opposite Acco Brands and Mach Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, Mach Natural 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 Mach Natural will offset losses from the drop in Mach Natural'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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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