Correlation Between Accenture Plc and Information Services
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and Information Services 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 Accenture Plc and Information Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and Information Services Group, you can compare the effects of market volatilities on Accenture Plc and Information Services 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 Accenture Plc with a short position of Information Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Information Services.
Diversification Opportunities for Accenture Plc and Information Services
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Accenture and Information is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Information Services Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services and Accenture Plc 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 Accenture plc are associated (or correlated) with Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of Accenture Plc i.e., Accenture Plc and Information Services go up and down completely randomly.
Pair Corralation between Accenture Plc and Information Services
Considering the 90-day investment horizon Accenture plc is expected to generate 0.69 times more return on investment than Information Services. However, Accenture plc is 1.46 times less risky than Information Services. It trades about 0.05 of its potential returns per unit of risk. Information Services Group is currently generating about -0.01 per unit of risk. If you would invest 26,521 in Accenture plc on September 29, 2024 and sell it today you would earn a total of 9,097 from holding Accenture plc or generate 34.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accenture plc vs. Information Services Group
Performance |
| Timeline |
| Accenture plc |
| Information Services |
Accenture Plc and Information Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and Information Services
The main advantage of trading using opposite Accenture Plc and Information Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, Information Services 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 Information Services will offset losses from the drop in Information Services' long position.| Accenture Plc vs. Information Services Group | Accenture Plc vs. Home Bancorp | Accenture Plc vs. Heritage Financial | Accenture Plc vs. CRA International |
| Information Services vs. Formula Systems 1985 | Information Services vs. CSP Inc | Information Services vs. Nayax | Information Services vs. The Hackett Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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