Correlation Between Imax Corp and Acco Brands

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

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

Diversification Opportunities for Imax Corp and Acco Brands

0.13

Correlation Coefficient

Imax Corp  Acco Brands

Average diversification

The 3 months correlation between Imax and Acco is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Imax Corp and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and Imax Corp 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 Imax Corp 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 Imax Corp i.e., Imax Corp and Acco Brands go up and down completely randomly.

Pair Corralation between Imax Corp and Acco Brands

Given the investment horizon of 90 days Imax Corp is expected to generate 0.6 times more return on investment than Acco Brands. However, Imax Corp is 1.67 times less risky than Acco Brands. It trades about 0.02 of its potential returns per unit of risk. Acco Brands is currently generating about -0.08 per unit of risk. If you would invest  2,465  in Imax Corp on December 18, 2024 and sell it today you would earn a total of  20.00  from holding Imax Corp or generate 0.81% return on investment over 90 days.

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

Imax Corp  vs.  Acco Brands

Imax Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Imax Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Imax Corp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Acco Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acco Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Imax Corp and Acco Brands

The main advantage of trading using opposite Imax Corp and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imax Corp 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 Imax Corp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.