Correlation Between Acco Brands and Analog Devices
Can any of the company-specific risk be diversified away by investing in both Acco Brands and Analog Devices 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 Acco Brands and Analog Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and Analog Devices, you can compare the effects of market volatilities on Acco Brands and Analog Devices 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 Acco Brands with a short position of Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Analog Devices.
Diversification Opportunities for Acco Brands and Analog Devices
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Acco and Analog is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices and Acco Brands 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 Acco Brands are associated (or correlated) with Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of Acco Brands i.e., Acco Brands and Analog Devices go up and down completely randomly.
Pair Corralation between Acco Brands and Analog Devices
Given the investment horizon of 90 days Acco Brands is expected to generate 1.43 times more return on investment than Analog Devices. However, Acco Brands is 1.43 times more volatile than Analog Devices. It trades about 0.28 of its potential returns per unit of risk. Analog Devices is currently generating about -0.12 per unit of risk. If you would invest 491.00 in Acco Brands on August 31, 2024 and sell it today you would earn a total of 90.00 from holding Acco Brands or generate 18.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acco Brands vs. Analog Devices
Performance |
| Timeline |
| Acco Brands |
| Analog Devices |
Acco Brands and Analog Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and Analog Devices
The main advantage of trading using opposite Acco Brands and Analog Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, Analog Devices 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 Analog Devices will offset losses from the drop in Analog Devices' long position.| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
| Analog Devices vs. MACOM Technology Solutions | Analog Devices vs. FormFactor | Analog Devices vs. MaxLinear | Analog Devices vs. nLIGHT Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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