Correlation Between Acco Brands and New Horizon
Can any of the company-specific risk be diversified away by investing in both Acco Brands and New Horizon 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 New Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and New Horizon Aircraft, you can compare the effects of market volatilities on Acco Brands and New Horizon 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 New Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and New Horizon.
Diversification Opportunities for Acco Brands and New Horizon
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Acco and New is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and New Horizon Aircraft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Horizon Aircraft 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 New Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Horizon Aircraft has no effect on the direction of Acco Brands i.e., Acco Brands and New Horizon go up and down completely randomly.
Pair Corralation between Acco Brands and New Horizon
Given the investment horizon of 90 days Acco Brands is expected to generate 2.08 times less return on investment than New Horizon. But when comparing it to its historical volatility, Acco Brands is 5.56 times less risky than New Horizon. It trades about 0.12 of its potential returns per unit of risk. New Horizon Aircraft is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 90.00 in New Horizon Aircraft on September 4, 2024 and sell it today you would lose (9.00) from holding New Horizon Aircraft or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acco Brands vs. New Horizon Aircraft
Performance |
| Timeline |
| Acco Brands |
| New Horizon Aircraft |
Acco Brands and New Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and New Horizon
The main advantage of trading using opposite Acco Brands and New Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, New Horizon 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 New Horizon will offset losses from the drop in New Horizon's long position.| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
| New Horizon vs. Acco Brands | New Horizon vs. Afya | New Horizon vs. Inflection Point Acquisition | New Horizon vs. Jacobs Solutions |
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 CEOs Directory module to screen CEOs from public companies around the world.
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