Correlation Between Certara and Accolade

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

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

Diversification Opportunities for Certara and Accolade

0.37

Correlation Coefficient

Certara  Accolade

Weak diversification

The 3 months correlation between Certara and Accolade is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Certara and Accolade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accolade and Certara 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 Certara are associated (or correlated) with Accolade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accolade has no effect on the direction of Certara i.e., Certara and Accolade go up and down completely randomly.

Pair Corralation between Certara and Accolade

Given the investment horizon of 90 days Certara is expected to under-perform the Accolade. But the stock apears to be less risky and, when comparing its historical volatility, Certara is 4.58 times less risky than Accolade. The stock trades about -0.02 of its potential returns per unit of risk. The Accolade is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  344.00  in Accolade on December 30, 2024 and sell it today you would earn a total of  355.00  from holding Accolade or generate 103.2% return on investment over 90 days.

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

Certara  vs.  Accolade

Certara

Risk-Adjusted Performance

Very Weak

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

Accolade

Risk-Adjusted Performance

OK

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

Pair Trading with Certara and Accolade

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

The idea behind Certara and Accolade 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.