Correlation Between Accenture Plc and Firan Technology

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

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

Diversification Opportunities for Accenture Plc and Firan Technology

0.92

Correlation Coefficient

Accenture Plc  Firan Technology

Almost no diversification

The 3 months correlation between Accenture and Firan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology 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 Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of Accenture Plc i.e., Accenture Plc and Firan Technology go up and down completely randomly.

Pair Corralation between Accenture Plc and Firan Technology

Assuming the 90 days horizon Accenture plc is expected to under-perform the Firan Technology. But the stock apears to be less risky and, when comparing its historical volatility, Accenture plc is 1.25 times less risky than Firan Technology. The stock trades about -0.21 of its potential returns per unit of risk. The Firan Technology Group is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  472.00  in Firan Technology Group on December 23, 2024 and sell it today you would lose (30.00) from holding Firan Technology Group or give up 6.36% of portfolio value over 90 days.

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

Accenture plc  vs.  Firan Technology Group

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. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Firan Technology

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Accenture Plc and Firan Technology

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

The idea behind Accenture plc and Firan Technology Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.