Correlation Between Fiserv and Accenture Plc

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

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

Diversification Opportunities for Fiserv and Accenture Plc

-0.09

Correlation Coefficient

Fiserv  Accenture Plc

Good diversification

The 3 months correlation between Fiserv and Accenture is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Fiserv Inc and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc and Fiserv 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 Fiserv Inc are associated (or correlated) with Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of Fiserv i.e., Fiserv and Accenture Plc go up and down completely randomly.

Pair Corralation between Fiserv and Accenture Plc

Given the investment horizon of 90 days Fiserv Inc is expected to generate 0.85 times more return on investment than Accenture Plc. However, Fiserv Inc is 1.18 times less risky than Accenture Plc. It trades about 0.04 of its potential returns per unit of risk. Accenture plc is currently generating about -0.04 per unit of risk. If you would invest  20,236  in Fiserv Inc on October 23, 2024 and sell it today you would earn a total of  622.00  from holding Fiserv Inc or generate 3.07% return on investment over 90 days.

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

Fiserv Inc  vs.  Accenture plc

Fiserv Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fiserv Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Fiserv is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Accenture plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accenture plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Accenture Plc is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Fiserv and Accenture Plc

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

The idea behind Fiserv Inc and Accenture plc 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.