Correlation Between Acco Brands and Graham

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

By analyzing existing cross correlation between Acco Brands and Graham Holdings 575, you can compare the effects of market volatilities on Acco Brands and Graham 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 Graham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Graham.

Diversification Opportunities for Acco Brands and Graham

0.29

Correlation Coefficient

Acco Brands  Graham

Modest diversification

The 3 months correlation between Acco and Graham is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Graham Holdings 575 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings 575 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 Graham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham Holdings 575 has no effect on the direction of Acco Brands i.e., Acco Brands and Graham go up and down completely randomly.

Pair Corralation between Acco Brands and Graham

Given the investment horizon of 90 days Acco Brands is expected to generate 240.59 times less return on investment than Graham. But when comparing it to its historical volatility, Acco Brands is 24.47 times less risky than Graham. It trades about 0.01 of its potential returns per unit of risk. Graham Holdings 575 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  9,884  in Graham Holdings 575 on October 23, 2024 and sell it today you would earn a total of  65.00  from holding Graham Holdings 575 or generate 0.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	63.03%
Values	Daily Returns

Acco Brands  vs.  Graham Holdings 575

Acco Brands

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Acco Brands are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Acco Brands may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Graham Holdings 575

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Graham Holdings 575 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Graham is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Acco Brands and Graham

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

The idea behind Acco Brands and Graham Holdings 575 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.