Correlation Between Acco Brands and Cheniere Energy
Can any of the company-specific risk be diversified away by investing in both Acco Brands and Cheniere Energy 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 Cheniere Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and Cheniere Energy Partners, you can compare the effects of market volatilities on Acco Brands and Cheniere Energy 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 Cheniere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Cheniere Energy.
Diversification Opportunities for Acco Brands and Cheniere Energy
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Acco and Cheniere is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Cheniere Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheniere Energy Partners 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 Cheniere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheniere Energy Partners has no effect on the direction of Acco Brands i.e., Acco Brands and Cheniere Energy go up and down completely randomly.
Pair Corralation between Acco Brands and Cheniere Energy
Given the investment horizon of 90 days Acco Brands is expected to generate 2.03 times more return on investment than Cheniere Energy. However, Acco Brands is 2.03 times more volatile than Cheniere Energy Partners. It trades about 0.31 of its potential returns per unit of risk. Cheniere Energy Partners is currently generating about 0.51 per unit of risk. If you would invest 481.00 in Acco Brands on August 30, 2024 and sell it today you would earn a total of 100.00 from holding Acco Brands or generate 20.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acco Brands vs. Cheniere Energy Partners
Performance |
| Timeline |
| Acco Brands |
| Cheniere Energy Partners |
Acco Brands and Cheniere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and Cheniere Energy
The main advantage of trading using opposite Acco Brands and Cheniere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, Cheniere Energy 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 Cheniere Energy will offset losses from the drop in Cheniere Energy's long position.| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
| Cheniere Energy vs. Antero Midstream Partners | Cheniere Energy vs. Excelerate Energy | Cheniere Energy vs. Energy Transfer LP | Cheniere Energy vs. Teekay |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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