Correlation Between Acco Brands and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Acco Brands and Biglari Holdings 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 Biglari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and Biglari Holdings, you can compare the effects of market volatilities on Acco Brands and Biglari Holdings 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 Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Biglari Holdings.
Diversification Opportunities for Acco Brands and Biglari Holdings
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acco and Biglari is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings 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 Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Acco Brands i.e., Acco Brands and Biglari Holdings go up and down completely randomly.
Pair Corralation between Acco Brands and Biglari Holdings
Given the investment horizon of 90 days Acco Brands is expected to under-perform the Biglari Holdings. In addition to that, Acco Brands is 1.76 times more volatile than Biglari Holdings. It trades about -0.11 of its total potential returns per unit of risk. Biglari Holdings is currently generating about 0.01 per unit of volatility. If you would invest 22,879 in Biglari Holdings on December 4, 2024 and sell it today you would lose (56.00) from holding Biglari Holdings or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Acco Brands vs. Biglari Holdings
Performance |
| Timeline |
| Acco Brands |
| Biglari Holdings |
Acco Brands and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and Biglari Holdings
The main advantage of trading using opposite Acco Brands and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, Biglari Holdings 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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