Correlation Between Acco Brands and Graham Holdings
Can any of the company-specific risk be diversified away by investing in both Acco Brands and Graham 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 Graham 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 Graham Holdings Co, you can compare the effects of market volatilities on Acco Brands and Graham 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 Graham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Graham Holdings.
Diversification Opportunities for Acco Brands and Graham Holdings
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Acco and Graham is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham 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 Graham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham Holdings has no effect on the direction of Acco Brands i.e., Acco Brands and Graham Holdings go up and down completely randomly.
Pair Corralation between Acco Brands and Graham Holdings
Given the investment horizon of 90 days Acco Brands is expected to under-perform the Graham Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Acco Brands is 1.14 times less risky than Graham Holdings. The stock trades about -0.59 of its potential returns per unit of risk. The Graham Holdings Co is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 95,074 in Graham Holdings Co on October 9, 2024 and sell it today you would lose (6,639) from holding Graham Holdings Co or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acco Brands vs. Graham Holdings Co
Performance |
| Timeline |
| Acco Brands |
| Graham Holdings |
Acco Brands and Graham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and Graham Holdings
The main advantage of trading using opposite Acco Brands and Graham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, Graham 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 Graham Holdings will offset losses from the drop in Graham 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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