Correlation Between Inclusio Sca and Accentis

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

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

Diversification Opportunities for Inclusio Sca and Accentis

-0.52

Correlation Coefficient

Inclusio Sca  Accentis

Excellent diversification

The 3 months correlation between Inclusio and Accentis is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Inclusio Sca and Accentis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accentis and Inclusio Sca 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 Inclusio Sca are associated (or correlated) with Accentis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accentis has no effect on the direction of Inclusio Sca i.e., Inclusio Sca and Accentis go up and down completely randomly.

Pair Corralation between Inclusio Sca and Accentis

Assuming the 90 days trading horizon Inclusio Sca is expected to under-perform the Accentis. But the stock apears to be less risky and, when comparing its historical volatility, Inclusio Sca is 2.31 times less risky than Accentis. The stock trades about -0.06 of its potential returns per unit of risk. The Accentis is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2.80  in Accentis on October 9, 2024 and sell it today you would earn a total of  0.30  from holding Accentis or generate 10.71% return on investment over 90 days.

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

Inclusio Sca  vs.  Accentis

Inclusio Sca

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inclusio Sca has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Accentis

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Accentis are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Accentis reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inclusio Sca and Accentis

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

The idea behind Inclusio Sca and Accentis 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.