Correlation Between Accenture Plc and FUJITSU

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

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

Diversification Opportunities for Accenture Plc and FUJITSU

-0.01

Correlation Coefficient

Accenture Plc  FUJITSU

Good diversification

The 3 months correlation between Accenture and FUJITSU is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and FUJITSU LTD ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUJITSU LTD ADR 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 FUJITSU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUJITSU LTD ADR has no effect on the direction of Accenture Plc i.e., Accenture Plc and FUJITSU go up and down completely randomly.

Pair Corralation between Accenture Plc and FUJITSU

Assuming the 90 days horizon Accenture plc is expected to under-perform the FUJITSU. But the stock apears to be less risky and, when comparing its historical volatility, Accenture plc is 1.08 times less risky than FUJITSU. The stock trades about -0.14 of its potential returns per unit of risk. The FUJITSU LTD ADR is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,690  in FUJITSU LTD ADR on December 28, 2024 and sell it today you would earn a total of  210.00  from holding FUJITSU LTD ADR or generate 12.43% return on investment over 90 days.

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

Accenture plc  vs.  FUJITSU LTD ADR

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 unsteady 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.

FUJITSU LTD ADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FUJITSU LTD ADR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, FUJITSU reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Accenture Plc and FUJITSU

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

The idea behind Accenture plc and FUJITSU LTD ADR 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.