Correlation Between Accenture Plc and ATMA Participaes

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

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

Diversification Opportunities for Accenture Plc and ATMA Participaes

-0.8

Correlation Coefficient

Accenture Plc  ATMA Participaes

Pay attention - limited upside

The 3 months correlation between Accenture and ATMA is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and ATMA Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATMA Participaes 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 ATMA Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATMA Participaes has no effect on the direction of Accenture Plc i.e., Accenture Plc and ATMA Participaes go up and down completely randomly.

Pair Corralation between Accenture Plc and ATMA Participaes

Assuming the 90 days trading horizon Accenture Plc is expected to generate 1.27 times less return on investment than ATMA Participaes. But when comparing it to its historical volatility, Accenture plc is 2.72 times less risky than ATMA Participaes. It trades about 0.06 of its potential returns per unit of risk. ATMA Participaes SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  115.00  in ATMA Participaes SA on October 13, 2024 and sell it today you would earn a total of  15.00  from holding ATMA Participaes SA or generate 13.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	91.97%
Values	Daily Returns

Accenture plc  vs.  ATMA Participaes SA

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.

ATMA Participaes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATMA Participaes SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Accenture Plc and ATMA Participaes

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

The idea behind Accenture plc and ATMA Participaes SA 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.