Correlation Between Accenture Plc and Blackline

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

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

Diversification Opportunities for Accenture Plc and Blackline

0.66

Correlation Coefficient

Accenture Plc  Blackline

Poor diversification

The 3 months correlation between Accenture and Blackline is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline and Accenture Plc 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 Accenture plc are associated (or correlated) with Blackline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackline has no effect on the direction of Accenture Plc i.e., Accenture Plc and Blackline go up and down completely randomly.

Pair Corralation between Accenture Plc and Blackline

Assuming the 90 days horizon Accenture Plc is expected to generate 1.24 times less return on investment than Blackline. But when comparing it to its historical volatility, Accenture plc is 1.18 times less risky than Blackline. It trades about 0.03 of its potential returns per unit of risk. Blackline is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  5,250  in Blackline on October 15, 2024 and sell it today you would earn a total of  150.00  from holding Blackline or generate 2.86% return on investment over 90 days.

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

Accenture plc  vs.  Blackline

Accenture plc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Accenture plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Accenture Plc is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Blackline

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Blackline is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Accenture Plc and Blackline

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

The idea behind Accenture plc and Blackline 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.