Correlation Between Accenture Plc and Atacado SA
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and Atacado SA 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 Atacado SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and Atacado SA, you can compare the effects of market volatilities on Accenture Plc and Atacado SA 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 Atacado SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Atacado SA.
Diversification Opportunities for Accenture Plc and Atacado SA
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Accenture and Atacado is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Atacado SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atacado SA 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 Atacado SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atacado SA has no effect on the direction of Accenture Plc i.e., Accenture Plc and Atacado SA go up and down completely randomly.
Pair Corralation between Accenture Plc and Atacado SA
Assuming the 90 days trading horizon Accenture plc is expected to generate 0.5 times more return on investment than Atacado SA. However, Accenture plc is 2.0 times less risky than Atacado SA. It trades about 0.22 of its potential returns per unit of risk. Atacado SA is currently generating about -0.15 per unit of risk. If you would invest 199,613 in Accenture plc on August 31, 2024 and sell it today you would earn a total of 13,671 from holding Accenture plc or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accenture plc vs. Atacado SA
Performance |
| Timeline |
| Accenture plc |
| Atacado SA |
Accenture Plc and Atacado SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and Atacado SA
The main advantage of trading using opposite Accenture Plc and Atacado SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, Atacado SA 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 Atacado SA will offset losses from the drop in Atacado SA's long position.| Accenture Plc vs. Waste Management | Accenture Plc vs. Mitsubishi UFJ Financial | Accenture Plc vs. Beyond Meat | Accenture Plc vs. The Trade Desk |
| Atacado SA vs. Companhia Brasileira de | Atacado SA vs. Raia Drogasil SA | Atacado SA vs. Lojas Renner SA | Atacado SA vs. Minerva SA |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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