Correlation Between Accenture Plc and Altria
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and Altria 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 Altria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and Altria Group, you can compare the effects of market volatilities on Accenture Plc and Altria 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 Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Altria.
Diversification Opportunities for Accenture Plc and Altria
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Accenture and Altria is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group 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 Altria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altria Group has no effect on the direction of Accenture Plc i.e., Accenture Plc and Altria go up and down completely randomly.
Pair Corralation between Accenture Plc and Altria
Assuming the 90 days trading horizon Accenture Plc is expected to generate 2.34 times less return on investment than Altria. But when comparing it to its historical volatility, Accenture plc is 1.02 times less risky than Altria. It trades about 0.05 of its potential returns per unit of risk. Altria Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 18,663 in Altria Group on October 27, 2024 and sell it today you would earn a total of 11,444 from holding Altria Group or generate 61.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.57% |
| Values | Daily Returns |
Accenture plc vs. Altria Group
Performance |
| Timeline |
| Accenture plc |
| Altria Group |
Accenture Plc and Altria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and Altria
The main advantage of trading using opposite Accenture Plc and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, Altria 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 Altria will offset losses from the drop in Altria's long position.| Accenture Plc vs. Roper Technologies, | Accenture Plc vs. TechnipFMC plc | Accenture Plc vs. Unity Software | Accenture Plc vs. Nordon Indstrias Metalrgicas |
| Altria vs. DXC Technology | Altria vs. METISA Metalrgica Timboense | Altria vs. Nordon Indstrias Metalrgicas | Altria vs. Bio Techne |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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