Correlation Between Acco Brands and Lake Resources
Can any of the company-specific risk be diversified away by investing in both Acco Brands and Lake Resources 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 Lake Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and Lake Resources NL, you can compare the effects of market volatilities on Acco Brands and Lake Resources 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 Lake Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Lake Resources.
Diversification Opportunities for Acco Brands and Lake Resources
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Acco and Lake is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Lake Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake Resources NL 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 Lake Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Resources NL has no effect on the direction of Acco Brands i.e., Acco Brands and Lake Resources go up and down completely randomly.
Pair Corralation between Acco Brands and Lake Resources
Given the investment horizon of 90 days Acco Brands is expected to generate 0.39 times more return on investment than Lake Resources. However, Acco Brands is 2.57 times less risky than Lake Resources. It trades about 0.33 of its potential returns per unit of risk. Lake Resources NL is currently generating about -0.2 per unit of risk. If you would invest 488.00 in Acco Brands on August 28, 2024 and sell it today you would earn a total of 108.00 from holding Acco Brands or generate 22.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Acco Brands vs. Lake Resources NL
Performance |
| Timeline |
| Acco Brands |
| Lake Resources NL |
Acco Brands and Lake Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and Lake Resources
The main advantage of trading using opposite Acco Brands and Lake Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, Lake Resources 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 Lake Resources will offset losses from the drop in Lake Resources' long position.| Acco Brands vs. Park Electrochemical | Acco Brands vs. Innovative Solutions and | Acco Brands vs. Curtiss Wright | Acco Brands vs. National Presto Industries |
| Lake Resources vs. Emerson Electric | Lake Resources vs. Cementos Pacasmayo SAA | Lake Resources vs. Willamette Valley Vineyards | Lake Resources vs. Topbuild Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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