Correlation Between Capstone Technologies and Accenture Plc

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

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

Diversification Opportunities for Capstone Technologies and Accenture Plc

0.02

Correlation Coefficient

Capstone Technologies  Accenture Plc

Significant diversification

The 3 months correlation between Capstone and Accenture is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Technologies Group and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc and Capstone Technologies 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 Capstone Technologies Group are associated (or correlated) with Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of Capstone Technologies i.e., Capstone Technologies and Accenture Plc go up and down completely randomly.

Pair Corralation between Capstone Technologies and Accenture Plc

Given the investment horizon of 90 days Capstone Technologies Group is expected to generate 0.22 times more return on investment than Accenture Plc. However, Capstone Technologies Group is 4.65 times less risky than Accenture Plc. It trades about -0.13 of its potential returns per unit of risk. Accenture plc is currently generating about -0.13 per unit of risk. If you would invest  36.00  in Capstone Technologies Group on December 30, 2024 and sell it today you would lose (1.00) from holding Capstone Technologies Group or give up 2.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Capstone Technologies Group  vs.  Accenture plc

Capstone Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capstone Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Capstone Technologies is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Accenture plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Accenture plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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 Capstone Technologies and Accenture Plc

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

The idea behind Capstone Technologies Group and Accenture 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.