Correlation Between Accel Solutions and Nova
Can any of the company-specific risk be diversified away by investing in both Accel Solutions and Nova 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 Accel Solutions and Nova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accel Solutions Group and Nova, you can compare the effects of market volatilities on Accel Solutions and Nova 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 Accel Solutions with a short position of Nova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accel Solutions and Nova.
Diversification Opportunities for Accel Solutions and Nova
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Accel and Nova is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Accel Solutions Group and Nova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova and Accel Solutions 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 Accel Solutions Group are associated (or correlated) with Nova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova has no effect on the direction of Accel Solutions i.e., Accel Solutions and Nova go up and down completely randomly.
Pair Corralation between Accel Solutions and Nova
Assuming the 90 days trading horizon Accel Solutions Group is expected to generate 0.81 times more return on investment than Nova. However, Accel Solutions Group is 1.23 times less risky than Nova. It trades about -0.08 of its potential returns per unit of risk. Nova is currently generating about -0.1 per unit of risk. If you would invest 13,560 in Accel Solutions Group on September 1, 2024 and sell it today you would lose (650.00) from holding Accel Solutions Group or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accel Solutions Group vs. Nova
Performance |
| Timeline |
| Accel Solutions Group |
| Nova |
Accel Solutions and Nova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accel Solutions and Nova
The main advantage of trading using opposite Accel Solutions and Nova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accel Solutions position performs unexpectedly, Nova 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 Nova will offset losses from the drop in Nova's long position.| Accel Solutions vs. Isras Investment | Accel Solutions vs. Analyst IMS Investment | Accel Solutions vs. Discount Investment Corp | Accel Solutions vs. Veridis Environment |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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