Correlation Between Acco Brands and Arrow Financial
Can any of the company-specific risk be diversified away by investing in both Acco Brands and Arrow Financial 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 Arrow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and Arrow Financial, you can compare the effects of market volatilities on Acco Brands and Arrow Financial 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 Arrow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Arrow Financial.
Diversification Opportunities for Acco Brands and Arrow Financial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Acco and Arrow is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Arrow Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Financial 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 Arrow Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Financial has no effect on the direction of Acco Brands i.e., Acco Brands and Arrow Financial go up and down completely randomly.
Pair Corralation between Acco Brands and Arrow Financial
Given the investment horizon of 90 days Acco Brands is expected to generate 1.23 times less return on investment than Arrow Financial. But when comparing it to its historical volatility, Acco Brands is 1.36 times less risky than Arrow Financial. It trades about 0.23 of its potential returns per unit of risk. Arrow Financial is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,878 in Arrow Financial on September 4, 2024 and sell it today you would earn a total of 429.00 from holding Arrow Financial or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Acco Brands vs. Arrow Financial
Performance |
| Timeline |
| Acco Brands |
| Arrow Financial |
Acco Brands and Arrow Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and Arrow Financial
The main advantage of trading using opposite Acco Brands and Arrow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, Arrow Financial 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 Arrow Financial will offset losses from the drop in Arrow Financial's long position.| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
| Arrow Financial vs. Heritage Commerce Corp | Arrow Financial vs. Westamerica Bancorporation | Arrow Financial vs. Heritage Financial | Arrow Financial vs. National Bankshares |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |