Correlation Between Xalles Holdings and Accenture Plc

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

By analyzing existing cross correlation between Xalles Holdings and Accenture plc, you can compare the effects of market volatilities on Xalles Holdings and Accenture Plc 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 Xalles Holdings with a short position of Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xalles Holdings and Accenture Plc.

Diversification Opportunities for Xalles Holdings and Accenture Plc

-0.21

Correlation Coefficient

Xalles Holdings  Accenture Plc

Very good diversification

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

Pair Corralation between Xalles Holdings and Accenture Plc

Given the investment horizon of 90 days Xalles Holdings is expected to under-perform the Accenture Plc. In addition to that, Xalles Holdings is 6.71 times more volatile than Accenture plc. It trades about -0.07 of its total potential returns per unit of risk. Accenture plc is currently generating about 0.05 per unit of volatility. If you would invest  34,816  in Accenture plc on September 13, 2024 and sell it today you would earn a total of  1,474  from holding Accenture plc or generate 4.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Xalles Holdings  vs.  Accenture plc

Xalles Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xalles Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Accenture plc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Accenture plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Accenture Plc is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Xalles Holdings and Accenture Plc

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

The idea behind Xalles Holdings and Accenture plc 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.