Correlation Between Acco Brands and Trump Media
Can any of the company-specific risk be diversified away by investing in both Acco Brands and Trump Media 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 Trump Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and Trump Media Technology, you can compare the effects of market volatilities on Acco Brands and Trump Media 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 Trump Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Trump Media.
Diversification Opportunities for Acco Brands and Trump Media
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Acco and Trump is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Trump Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trump Media Technology 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 Trump Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trump Media Technology has no effect on the direction of Acco Brands i.e., Acco Brands and Trump Media go up and down completely randomly.
Pair Corralation between Acco Brands and Trump Media
Given the investment horizon of 90 days Acco Brands is expected to generate 10.26 times less return on investment than Trump Media. But when comparing it to its historical volatility, Acco Brands is 4.69 times less risky than Trump Media. It trades about 0.09 of its potential returns per unit of risk. Trump Media Technology is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,035 in Trump Media Technology on August 30, 2024 and sell it today you would earn a total of 1,041 from holding Trump Media Technology or generate 100.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Acco Brands vs. Trump Media Technology
Performance |
| Timeline |
| Acco Brands |
| Trump Media Technology |
Acco Brands and Trump Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and Trump Media
The main advantage of trading using opposite Acco Brands and Trump Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, Trump Media 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 Trump Media will offset losses from the drop in Trump Media's long position.| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
| Trump Media vs. Pearson PLC ADR | Trump Media vs. Acco Brands | Trump Media vs. Relx PLC ADR | Trump Media vs. Eastman Chemical |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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