Correlation Between ACCOR SPADR and Accor SA
Can any of the company-specific risk be diversified away by investing in both ACCOR SPADR and Accor 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 ACCOR SPADR and Accor SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACCOR SPADR NEW and Accor SA, you can compare the effects of market volatilities on ACCOR SPADR and Accor 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 ACCOR SPADR with a short position of Accor SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACCOR SPADR and Accor SA.
Diversification Opportunities for ACCOR SPADR and Accor SA
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between ACCOR and Accor is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding ACCOR SPADR NEW and Accor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor SA and ACCOR SPADR 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 ACCOR SPADR NEW are associated (or correlated) with Accor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor SA has no effect on the direction of ACCOR SPADR i.e., ACCOR SPADR and Accor SA go up and down completely randomly.
Pair Corralation between ACCOR SPADR and Accor SA
Assuming the 90 days trading horizon ACCOR SPADR NEW is expected to under-perform the Accor SA. But the stock apears to be less risky and, when comparing its historical volatility, ACCOR SPADR NEW is 1.04 times less risky than Accor SA. The stock trades about -0.15 of its potential returns per unit of risk. The Accor SA is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 4,805 in Accor SA on January 16, 2025 and sell it today you would lose (951.00) from holding Accor SA or give up 19.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACCOR SPADR NEW vs. Accor SA
Performance |
| Timeline |
| ACCOR SPADR NEW |
| Accor SA |
ACCOR SPADR and Accor SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACCOR SPADR and Accor SA
The main advantage of trading using opposite ACCOR SPADR and Accor SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACCOR SPADR position performs unexpectedly, Accor 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 Accor SA will offset losses from the drop in Accor SA's long position.| ACCOR SPADR vs. Harmony Gold Mining | ACCOR SPADR vs. Chengdu PUTIAN Telecommunications | ACCOR SPADR vs. CHINA TELECOM H | ACCOR SPADR vs. CORNISH METALS INC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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