Correlation Between ALLTEL and Acco Brands

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

By analyzing existing cross correlation between ALLTEL P 68 and Acco Brands, you can compare the effects of market volatilities on ALLTEL 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 ALLTEL with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLTEL and Acco Brands.

Diversification Opportunities for ALLTEL and Acco Brands

-0.04

Correlation Coefficient

ALLTEL  Acco Brands

Good diversification

The 3 months correlation between ALLTEL and Acco is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding ALLTEL P 68 and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and ALLTEL 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 ALLTEL P 68 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 ALLTEL i.e., ALLTEL and Acco Brands go up and down completely randomly.

Pair Corralation between ALLTEL and Acco Brands

Assuming the 90 days trading horizon ALLTEL P 68 is expected to generate 0.37 times more return on investment than Acco Brands. However, ALLTEL P 68 is 2.72 times less risky than Acco Brands. It trades about 0.11 of its potential returns per unit of risk. Acco Brands is currently generating about -0.09 per unit of risk. If you would invest  10,361  in ALLTEL P 68 on December 22, 2024 and sell it today you would earn a total of  212.00  from holding ALLTEL P 68 or generate 2.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	29.51%
Values	Daily Returns

ALLTEL P 68  vs.  Acco Brands

ALLTEL P 68

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ALLTEL P 68 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ALLTEL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 ALLTEL and Acco Brands

The main advantage of trading using opposite ALLTEL and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALLTEL 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 ALLTEL P 68 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 CEOs Directory module to screen CEOs from public companies around the world.