Correlation Between Acco Brands and TOTAL

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

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

Diversification Opportunities for Acco Brands and TOTAL

0.16

Correlation Coefficient

Acco Brands  TOTAL

Average diversification

The 3 months correlation between Acco and TOTAL is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and TOTAL CAPITAL INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTAL CAPITAL INTERN 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 TOTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTAL CAPITAL INTERN has no effect on the direction of Acco Brands i.e., Acco Brands and TOTAL go up and down completely randomly.

Pair Corralation between Acco Brands and TOTAL

Given the investment horizon of 90 days Acco Brands is expected to under-perform the TOTAL. In addition to that, Acco Brands is 2.45 times more volatile than TOTAL CAPITAL INTERNATIONAL. It trades about -0.07 of its total potential returns per unit of risk. TOTAL CAPITAL INTERNATIONAL is currently generating about 0.1 per unit of volatility. If you would invest  6,450  in TOTAL CAPITAL INTERNATIONAL on December 30, 2024 and sell it today you would earn a total of  327.00  from holding TOTAL CAPITAL INTERNATIONAL or generate 5.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	72.58%
Values	Daily Returns

Acco Brands  vs.  TOTAL CAPITAL INTERNATIONAL

Acco Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acco Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

TOTAL CAPITAL INTERN

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TOTAL CAPITAL INTERNATIONAL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, TOTAL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Acco Brands and TOTAL

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

The idea behind Acco Brands and TOTAL CAPITAL INTERNATIONAL 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.