Correlation Between Accord Financial and Ceres Global

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

By analyzing existing cross correlation between Accord Financial Corp and Ceres Global Ag, you can compare the effects of market volatilities on Accord Financial and Ceres Global 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 Accord Financial with a short position of Ceres Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accord Financial and Ceres Global.

Diversification Opportunities for Accord Financial and Ceres Global

-0.2

Correlation Coefficient

Accord Financial  Ceres Global

Good diversification

The 3 months correlation between Accord and Ceres is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Accord Financial Corp and Ceres Global Ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceres Global Ag and Accord Financial 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 Accord Financial Corp are associated (or correlated) with Ceres Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceres Global Ag has no effect on the direction of Accord Financial i.e., Accord Financial and Ceres Global go up and down completely randomly.

Pair Corralation between Accord Financial and Ceres Global

Assuming the 90 days trading horizon Accord Financial Corp is expected to under-perform the Ceres Global. But the stock apears to be less risky and, when comparing its historical volatility, Accord Financial Corp is 1.14 times less risky than Ceres Global. The stock trades about -0.01 of its potential returns per unit of risk. The Ceres Global Ag is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  307.00  in Ceres Global Ag on September 12, 2024 and sell it today you would lose (3.00) from holding Ceres Global Ag or give up 0.98% of portfolio value over 90 days.

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

Accord Financial Corp  vs.  Ceres Global Ag

Accord Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accord Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Accord Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Ceres Global Ag

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ceres Global Ag are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ceres Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Accord Financial and Ceres Global

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

The idea behind Accord Financial Corp and Ceres Global Ag 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.