Correlation Between Accesso Technology and Inspired Plc

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

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

Diversification Opportunities for Accesso Technology and Inspired Plc

-0.55

Correlation Coefficient

Accesso Technology  Inspired Plc

Excellent diversification

The 3 months correlation between Accesso and Inspired is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Accesso Technology Group and Inspired Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspired Plc and Accesso Technology 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 Accesso Technology Group are associated (or correlated) with Inspired Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspired Plc has no effect on the direction of Accesso Technology i.e., Accesso Technology and Inspired Plc go up and down completely randomly.

Pair Corralation between Accesso Technology and Inspired Plc

Assuming the 90 days trading horizon Accesso Technology Group is expected to under-perform the Inspired Plc. But the stock apears to be less risky and, when comparing its historical volatility, Accesso Technology Group is 1.39 times less risky than Inspired Plc. The stock trades about -0.01 of its potential returns per unit of risk. The Inspired Plc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3,820  in Inspired Plc on October 25, 2024 and sell it today you would earn a total of  1,080  from holding Inspired Plc or generate 28.27% return on investment over 90 days.

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

Accesso Technology Group  vs.  Inspired Plc

Accesso Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accesso Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Accesso Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Inspired Plc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inspired Plc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Inspired Plc unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Accesso Technology and Inspired Plc

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

The idea behind Accesso Technology Group and Inspired Plc 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.