Correlation Between Alchemy Investments and Acco Brands

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

By analyzing existing cross correlation between Alchemy Investments Acquisition and Acco Brands, you can compare the effects of market volatilities on Alchemy Investments and Acco Brands 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 Alchemy Investments with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alchemy Investments and Acco Brands.

Diversification Opportunities for Alchemy Investments and Acco Brands

-0.43

Correlation Coefficient

Alchemy Investments  Acco Brands

Very good diversification

The 3 months correlation between Alchemy and Acco is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Alchemy Investments Acquisitio and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and Alchemy Investments 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 Alchemy Investments Acquisition are associated (or correlated) with Acco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acco Brands has no effect on the direction of Alchemy Investments i.e., Alchemy Investments and Acco Brands go up and down completely randomly.

Pair Corralation between Alchemy Investments and Acco Brands

Assuming the 90 days horizon Alchemy Investments Acquisition is expected to generate 4.09 times more return on investment than Acco Brands. However, Alchemy Investments is 4.09 times more volatile than Acco Brands. It trades about 0.1 of its potential returns per unit of risk. Acco Brands is currently generating about -0.07 per unit of risk. If you would invest  9.01  in Alchemy Investments Acquisition on December 28, 2024 and sell it today you would earn a total of  1.99  from holding Alchemy Investments Acquisition or generate 22.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	63.93%
Values	Daily Returns

Alchemy Investments Acquisitio  vs.  Acco Brands

Alchemy Investments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alchemy Investments Acquisition are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Alchemy Investments showed solid returns over the last few months and may actually be approaching a breakup point.

Acco Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acco Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Alchemy Investments and Acco Brands

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

The idea behind Alchemy Investments Acquisition and Acco Brands 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.