Correlation Between Accenture Plc and Wipro Limited
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and Wipro Limited 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 Wipro Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and Wipro Limited ADR, you can compare the effects of market volatilities on Accenture Plc and Wipro Limited 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 Wipro Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Wipro Limited.
Diversification Opportunities for Accenture Plc and Wipro Limited
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Accenture and Wipro is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Wipro Limited ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wipro Limited ADR 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 Wipro Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wipro Limited ADR has no effect on the direction of Accenture Plc i.e., Accenture Plc and Wipro Limited go up and down completely randomly.
Pair Corralation between Accenture Plc and Wipro Limited
Considering the 90-day investment horizon Accenture plc is expected to generate 0.56 times more return on investment than Wipro Limited. However, Accenture plc is 1.77 times less risky than Wipro Limited. It trades about -0.24 of its potential returns per unit of risk. Wipro Limited ADR is currently generating about -0.2 per unit of risk. If you would invest 37,059 in Accenture plc on October 20, 2024 and sell it today you would lose (1,800) from holding Accenture plc or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accenture plc vs. Wipro Limited ADR
Performance |
| Timeline |
| Accenture plc |
| Wipro Limited ADR |
Accenture Plc and Wipro Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and Wipro Limited
The main advantage of trading using opposite Accenture Plc and Wipro Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, Wipro Limited 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 Wipro Limited will offset losses from the drop in Wipro Limited's long position.| Accenture Plc vs. Globant SA | Accenture Plc vs. Concentrix | Accenture Plc vs. Cognizant Technology Solutions | Accenture Plc vs. CDW Corp |
| Wipro Limited vs. Cognizant Technology Solutions | Wipro Limited vs. Accenture plc | Wipro Limited vs. Fiserv Inc | Wipro Limited vs. Gartner |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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