Correlation Between Retractable Technologies and Accolade

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

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

Diversification Opportunities for Retractable Technologies and Accolade

0.84

Correlation Coefficient

Retractable Technologies  Accolade

Very poor diversification

The 3 months correlation between Retractable and Accolade is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Retractable Technologies and Accolade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accolade and Retractable Technologies 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 Retractable Technologies are associated (or correlated) with Accolade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accolade has no effect on the direction of Retractable Technologies i.e., Retractable Technologies and Accolade go up and down completely randomly.

Pair Corralation between Retractable Technologies and Accolade

Considering the 90-day investment horizon Retractable Technologies is expected to generate 8.3 times more return on investment than Accolade. However, Retractable Technologies is 8.3 times more volatile than Accolade. It trades about 0.04 of its potential returns per unit of risk. Accolade is currently generating about 0.14 per unit of risk. If you would invest  79.00  in Retractable Technologies on November 28, 2024 and sell it today you would earn a total of  1.00  from holding Retractable Technologies or generate 1.27% return on investment over 90 days.

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

Retractable Technologies  vs.  Accolade

Retractable Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Retractable Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Retractable Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Accolade

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Accolade are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Accolade exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Retractable Technologies and Accolade

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

The idea behind Retractable Technologies and Accolade 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.