Correlation Between Versarien PLC and Accelleron Industries

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

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

Diversification Opportunities for Versarien PLC and Accelleron Industries

0.21

Correlation Coefficient

Versarien PLC  Accelleron Industries

Modest diversification

The 3 months correlation between Versarien and Accelleron is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Versarien PLC and Accelleron Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelleron Industries and Versarien PLC 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 Versarien PLC are associated (or correlated) with Accelleron Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelleron Industries has no effect on the direction of Versarien PLC i.e., Versarien PLC and Accelleron Industries go up and down completely randomly.

Pair Corralation between Versarien PLC and Accelleron Industries

Assuming the 90 days trading horizon Versarien PLC is expected to under-perform the Accelleron Industries. In addition to that, Versarien PLC is 3.83 times more volatile than Accelleron Industries AG. It trades about -0.03 of its total potential returns per unit of risk. Accelleron Industries AG is currently generating about -0.06 per unit of volatility. If you would invest  4,640  in Accelleron Industries AG on December 26, 2024 and sell it today you would lose (244.00) from holding Accelleron Industries AG or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Versarien PLC  vs.  Accelleron Industries AG

Versarien PLC

Risk-Adjusted Performance

Very Weak

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

Accelleron Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Accelleron Industries AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Accelleron Industries is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Versarien PLC and Accelleron Industries

The main advantage of trading using opposite Versarien PLC and Accelleron Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Versarien PLC position performs unexpectedly, Accelleron Industries 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 Accelleron Industries will offset losses from the drop in Accelleron Industries' long position.

The idea behind Versarien PLC and Accelleron Industries AG 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.

Check out your portfolio center.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.