Correlation Between Apple and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Accenture Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Accenture plc, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Accenture Plc.
Diversification Opportunities for Apple and Accenture Plc
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and Accenture is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc and Apple 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 Apple Inc 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 Apple i.e., Apple and Accenture Plc go up and down completely randomly.
Pair Corralation between Apple and Accenture Plc
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.83 times more return on investment than Accenture Plc. However, Apple Inc is 1.21 times less risky than Accenture Plc. It trades about 0.11 of its potential returns per unit of risk. Accenture plc is currently generating about 0.07 per unit of risk. If you would invest 4,609 in Apple Inc on August 24, 2024 and sell it today you would earn a total of 2,022 from holding Apple Inc or generate 43.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.2% |
| Values | Daily Returns |
Apple Inc vs. Accenture plc
Performance |
| Timeline |
| Apple Inc |
| Accenture plc |
Apple and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Accenture Plc
The main advantage of trading using opposite Apple and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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 Apple Inc 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.| Accenture Plc vs. Bio Techne | Accenture Plc vs. MAHLE Metal Leve | Accenture Plc vs. Unity Software | Accenture Plc vs. Technos SA |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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