Correlation Between TOLEDO and Acco Brands

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

By analyzing existing cross correlation between TOLEDO HOSP 5325 and Acco Brands, you can compare the effects of market volatilities on TOLEDO 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 TOLEDO with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOLEDO and Acco Brands.

Diversification Opportunities for TOLEDO and Acco Brands

-0.43

Correlation Coefficient

TOLEDO  Acco Brands

Very good diversification

The 3 months correlation between TOLEDO and Acco is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding TOLEDO HOSP 5325 and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and TOLEDO 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 TOLEDO HOSP 5325 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 TOLEDO i.e., TOLEDO and Acco Brands go up and down completely randomly.

Pair Corralation between TOLEDO and Acco Brands

Assuming the 90 days trading horizon TOLEDO HOSP 5325 is expected to generate 1.44 times more return on investment than Acco Brands. However, TOLEDO is 1.44 times more volatile than Acco Brands. It trades about -0.03 of its potential returns per unit of risk. Acco Brands is currently generating about -0.09 per unit of risk. If you would invest  9,707  in TOLEDO HOSP 5325 on December 23, 2024 and sell it today you would lose (943.00) from holding TOLEDO HOSP 5325 or give up 9.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	72.13%
Values	Daily Returns

TOLEDO HOSP 5325  vs.  Acco Brands

TOLEDO HOSP 5325

Risk-Adjusted Performance

Very Weak

Over the last 90 days TOLEDO HOSP 5325 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for TOLEDO HOSP 5325 investors.

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 TOLEDO and Acco Brands

The main advantage of trading using opposite TOLEDO and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOLEDO 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 TOLEDO HOSP 5325 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.