Correlation Between 1248EPBR3 and Acco Brands

Can any of the company-specific risk be diversified away by investing in both 1248EPBR3 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 1248EPBR3 and Acco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CCO Holdings 55 and Acco Brands, you can compare the effects of market volatilities on 1248EPBR3 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 1248EPBR3 with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1248EPBR3 and Acco Brands.

Diversification Opportunities for 1248EPBR3 and Acco Brands

0.28

Correlation Coefficient

1248EPBR3  Acco Brands

Modest diversification

The 3 months correlation between 1248EPBR3 and Acco is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CCO Holdings 55 and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and 1248EPBR3 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 CCO Holdings 55 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 1248EPBR3 i.e., 1248EPBR3 and Acco Brands go up and down completely randomly.

Pair Corralation between 1248EPBR3 and Acco Brands

Assuming the 90 days trading horizon CCO Holdings 55 is expected to generate 0.09 times more return on investment than Acco Brands. However, CCO Holdings 55 is 11.0 times less risky than Acco Brands. It trades about 0.0 of its potential returns per unit of risk. Acco Brands is currently generating about -0.04 per unit of risk. If you would invest  9,978  in CCO Holdings 55 on November 20, 2024 and sell it today you would lose (3.00) from holding CCO Holdings 55 or give up 0.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	89.83%
Values	Daily Returns

CCO Holdings 55  vs.  Acco Brands

CCO Holdings 55

Risk-Adjusted Performance

Very Weak

Over the last 90 days CCO Holdings 55 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, 1248EPBR3 is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 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 1248EPBR3 and Acco Brands

The main advantage of trading using opposite 1248EPBR3 and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1248EPBR3 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 CCO Holdings 55 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.