Correlation Between Acco Brands and PHINIA
Can any of the company-specific risk be diversified away by investing in both Acco Brands and PHINIA 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 PHINIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and PHINIA Inc, you can compare the effects of market volatilities on Acco Brands and PHINIA 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 PHINIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and PHINIA.
Diversification Opportunities for Acco Brands and PHINIA
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Acco and PHINIA is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and PHINIA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHINIA Inc 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 PHINIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHINIA Inc has no effect on the direction of Acco Brands i.e., Acco Brands and PHINIA go up and down completely randomly.
Pair Corralation between Acco Brands and PHINIA
Given the investment horizon of 90 days Acco Brands is expected to under-perform the PHINIA. In addition to that, Acco Brands is 1.55 times more volatile than PHINIA Inc. It trades about 0.0 of its total potential returns per unit of risk. PHINIA Inc is currently generating about 0.08 per unit of volatility. If you would invest 5,236 in PHINIA Inc on September 13, 2024 and sell it today you would earn a total of 121.00 from holding PHINIA Inc or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Acco Brands vs. PHINIA Inc
Performance |
| Timeline |
| Acco Brands |
| PHINIA Inc |
Acco Brands and PHINIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and PHINIA
The main advantage of trading using opposite Acco Brands and PHINIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, PHINIA 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 PHINIA will offset losses from the drop in PHINIA's 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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