Correlation Between Tower One and Acco Brands

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

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

Diversification Opportunities for Tower One and Acco Brands

0.36

Correlation Coefficient

Tower One  Acco Brands

Weak diversification

The 3 months correlation between Tower and Acco is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tower One Wireless and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and Tower One 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 Tower One Wireless 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 Tower One i.e., Tower One and Acco Brands go up and down completely randomly.

Pair Corralation between Tower One and Acco Brands

Assuming the 90 days horizon Tower One Wireless is expected to under-perform the Acco Brands. In addition to that, Tower One is 5.3 times more volatile than Acco Brands. It trades about -0.13 of its total potential returns per unit of risk. Acco Brands is currently generating about 0.03 per unit of volatility. If you would invest  503.00  in Acco Brands on October 20, 2024 and sell it today you would earn a total of  17.00  from holding Acco Brands or generate 3.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Tower One Wireless  vs.  Acco Brands

Tower One Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tower One Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Acco Brands

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Acco Brands are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Acco Brands is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Tower One and Acco Brands

The main advantage of trading using opposite Tower One and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower One 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 Tower One Wireless 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.