Correlation Between ChampionX and Acco Brands

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

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

Diversification Opportunities for ChampionX and Acco Brands

0.41

Correlation Coefficient

ChampionX  Acco Brands

Very weak diversification

The 3 months correlation between ChampionX and Acco is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and ChampionX 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 ChampionX 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 ChampionX i.e., ChampionX and Acco Brands go up and down completely randomly.

Pair Corralation between ChampionX and Acco Brands

Considering the 90-day investment horizon ChampionX is expected to generate 3.72 times less return on investment than Acco Brands. But when comparing it to its historical volatility, ChampionX is 1.14 times less risky than Acco Brands. It trades about 0.03 of its potential returns per unit of risk. Acco Brands is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  531.00  in Acco Brands on September 3, 2024 and sell it today you would earn a total of  82.00  from holding Acco Brands or generate 15.44% return on investment over 90 days.

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

ChampionX  vs.  Acco Brands

ChampionX

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ChampionX are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, ChampionX is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Acco Brands

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Acco Brands are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Acco Brands displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ChampionX and Acco Brands

The main advantage of trading using opposite ChampionX and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX 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 ChampionX 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.