Correlation Between Acco Brands and Strategic Education
Can any of the company-specific risk be diversified away by investing in both Acco Brands and Strategic Education 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 Strategic Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and Strategic Education, you can compare the effects of market volatilities on Acco Brands and Strategic Education 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 Strategic Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Strategic Education.
Diversification Opportunities for Acco Brands and Strategic Education
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Acco and Strategic is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Education 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 Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of Acco Brands i.e., Acco Brands and Strategic Education go up and down completely randomly.
Pair Corralation between Acco Brands and Strategic Education
Given the investment horizon of 90 days Acco Brands is expected to under-perform the Strategic Education. But the stock apears to be less risky and, when comparing its historical volatility, Acco Brands is 1.05 times less risky than Strategic Education. The stock trades about -0.59 of its potential returns per unit of risk. The Strategic Education is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 9,860 in Strategic Education on October 9, 2024 and sell it today you would lose (664.00) from holding Strategic Education or give up 6.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acco Brands vs. Strategic Education
Performance |
| Timeline |
| Acco Brands |
| Strategic Education |
Acco Brands and Strategic Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and Strategic Education
The main advantage of trading using opposite Acco Brands and Strategic Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, Strategic Education 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 Strategic Education will offset losses from the drop in Strategic Education's long position.| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
| Strategic Education vs. Element Solutions | Strategic Education vs. DoubleVerify Holdings | Strategic Education vs. CECO Environmental Corp | Strategic Education vs. American Public Education |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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