Correlation Between Adidas AG and Accsys Technologies
Can any of the company-specific risk be diversified away by investing in both Adidas AG and Accsys Technologies 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 Adidas AG and Accsys Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adidas AG and Accsys Technologies PLC, you can compare the effects of market volatilities on Adidas AG and Accsys Technologies 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 Adidas AG with a short position of Accsys Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adidas AG and Accsys Technologies.
Diversification Opportunities for Adidas AG and Accsys Technologies
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Adidas and Accsys is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Adidas AG and Accsys Technologies PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accsys Technologies PLC and Adidas AG 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 Adidas AG are associated (or correlated) with Accsys Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accsys Technologies PLC has no effect on the direction of Adidas AG i.e., Adidas AG and Accsys Technologies go up and down completely randomly.
Pair Corralation between Adidas AG and Accsys Technologies
Assuming the 90 days trading horizon Adidas AG is expected to generate 0.64 times more return on investment than Accsys Technologies. However, Adidas AG is 1.56 times less risky than Accsys Technologies. It trades about 0.06 of its potential returns per unit of risk. Accsys Technologies PLC is currently generating about -0.17 per unit of risk. If you would invest 21,600 in Adidas AG on August 27, 2024 and sell it today you would earn a total of 495.00 from holding Adidas AG or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adidas AG vs. Accsys Technologies PLC
Performance |
| Timeline |
| Adidas AG |
| Accsys Technologies PLC |
Adidas AG and Accsys Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adidas AG and Accsys Technologies
The main advantage of trading using opposite Adidas AG and Accsys Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adidas AG position performs unexpectedly, Accsys Technologies 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 Accsys Technologies will offset losses from the drop in Accsys Technologies' long position.| Adidas AG vs. Accsys Technologies PLC | Adidas AG vs. Roper Technologies | Adidas AG vs. DXC Technology Co | Adidas AG vs. Playtech Plc |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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