Correlation Between Accenture Plc and NTT Data
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and NTT Data 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 NTT Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and NTT Data Corp, you can compare the effects of market volatilities on Accenture Plc and NTT Data 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 NTT Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and NTT Data.
Diversification Opportunities for Accenture Plc and NTT Data
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Accenture and NTT is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and NTT Data Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTT Data Corp 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 NTT Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTT Data Corp has no effect on the direction of Accenture Plc i.e., Accenture Plc and NTT Data go up and down completely randomly.
Pair Corralation between Accenture Plc and NTT Data
Considering the 90-day investment horizon Accenture plc is expected to under-perform the NTT Data. But the stock apears to be less risky and, when comparing its historical volatility, Accenture plc is 1.21 times less risky than NTT Data. The stock trades about -0.12 of its potential returns per unit of risk. The NTT Data Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,923 in NTT Data Corp on December 27, 2024 and sell it today you would lose (94.00) from holding NTT Data Corp or give up 4.89% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Accenture plc vs. NTT Data Corp
Performance |
Timeline |
Accenture plc |
NTT Data Corp |
Accenture Plc and NTT Data Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Accenture Plc and NTT Data
The main advantage of trading using opposite Accenture Plc and NTT Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, NTT Data 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 NTT Data will offset losses from the drop in NTT Data's long position.Accenture Plc vs. Globant SA | Accenture Plc vs. Concentrix | Accenture Plc vs. Cognizant Technology Solutions | Accenture Plc vs. CDW Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Global Correlations Find global opportunities by holding instruments from different markets |