Correlation Between Accenture Plc and BBX Capital

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

By analyzing existing cross correlation between Accenture plc and BBX Capital, you can compare the effects of market volatilities on Accenture Plc and BBX Capital 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 Accenture Plc with a short position of BBX Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and BBX Capital.

Diversification Opportunities for Accenture Plc and BBX Capital

-0.52

Correlation Coefficient

Accenture Plc  BBX Capital

Excellent diversification

The 3 months correlation between Accenture and BBX is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and BBX Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBX Capital and Accenture Plc 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 Accenture plc are associated (or correlated) with BBX Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBX Capital has no effect on the direction of Accenture Plc i.e., Accenture Plc and BBX Capital go up and down completely randomly.

Pair Corralation between Accenture Plc and BBX Capital

Considering the 90-day investment horizon Accenture plc is expected to generate 3.18 times more return on investment than BBX Capital. However, Accenture Plc is 3.18 times more volatile than BBX Capital. It trades about 0.07 of its potential returns per unit of risk. BBX Capital is currently generating about -0.14 per unit of risk. If you would invest  34,049  in Accenture plc on August 31, 2024 and sell it today you would earn a total of  2,167  from holding Accenture plc or generate 6.36% return on investment over 90 days.

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

Accenture plc  vs.  BBX Capital

Accenture plc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Accenture plc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Accenture Plc may actually be approaching a critical reversion point that can send shares even higher in December 2024.

BBX Capital

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Accenture Plc and BBX Capital

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

The idea behind Accenture plc and BBX Capital 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.

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 CEOs Directory module to screen CEOs from public companies around the world.