Correlation Between Accenture Plc and AMETEK,

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

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

Diversification Opportunities for Accenture Plc and AMETEK,

0.71

Correlation Coefficient

Accenture Plc  AMETEK,

Poor diversification

The 3 months correlation between Accenture and AMETEK, is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and AMETEK, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMETEK, 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 AMETEK,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMETEK, has no effect on the direction of Accenture Plc i.e., Accenture Plc and AMETEK, go up and down completely randomly.

Pair Corralation between Accenture Plc and AMETEK,

Assuming the 90 days trading horizon Accenture plc is expected to generate 1.03 times more return on investment than AMETEK,. However, Accenture Plc is 1.03 times more volatile than AMETEK,. It trades about 0.06 of its potential returns per unit of risk. AMETEK, is currently generating about 0.06 per unit of risk. If you would invest  142,284  in Accenture plc on October 13, 2024 and sell it today you would earn a total of  72,316  from holding Accenture plc or generate 50.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.08%
Values	Daily Returns

Accenture plc  vs.  AMETEK,

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. Despite somewhat weak basic indicators, Accenture Plc may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AMETEK,

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AMETEK, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, AMETEK, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Accenture Plc and AMETEK,

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

The idea behind Accenture plc and AMETEK, 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.