Correlation Between Simulations Plus and Accolade

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

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

Diversification Opportunities for Simulations Plus and Accolade

0.6

Correlation Coefficient

Simulations Plus  Accolade

Poor diversification

The 3 months correlation between Simulations and Accolade is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Simulations Plus and Accolade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accolade and Simulations Plus 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 Simulations Plus 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 Simulations Plus i.e., Simulations Plus and Accolade go up and down completely randomly.

Pair Corralation between Simulations Plus and Accolade

Considering the 90-day investment horizon Simulations Plus is expected to generate 0.59 times more return on investment than Accolade. However, Simulations Plus is 1.7 times less risky than Accolade. It trades about 0.0 of its potential returns per unit of risk. Accolade is currently generating about -0.01 per unit of risk. If you would invest  3,883  in Simulations Plus on August 31, 2024 and sell it today you would lose (701.00) from holding Simulations Plus or give up 18.05% of portfolio value over 90 days.

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

Simulations Plus  vs.  Accolade

Simulations Plus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simulations Plus has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Simulations Plus is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Accolade

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accolade has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Simulations Plus and Accolade

The main advantage of trading using opposite Simulations Plus and Accolade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simulations Plus 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 Simulations Plus 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.