Correlation Between Altus Group and Accord Financial
Can any of the company-specific risk be diversified away by investing in both Altus Group and Accord Financial 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 Altus Group and Accord Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altus Group Limited and Accord Financial Corp, you can compare the effects of market volatilities on Altus Group and Accord Financial 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 Altus Group with a short position of Accord Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altus Group and Accord Financial.
Diversification Opportunities for Altus Group and Accord Financial
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Altus and Accord is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Altus Group Limited and Accord Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accord Financial Corp and Altus Group 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 Altus Group Limited are associated (or correlated) with Accord Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accord Financial Corp has no effect on the direction of Altus Group i.e., Altus Group and Accord Financial go up and down completely randomly.
Pair Corralation between Altus Group and Accord Financial
Assuming the 90 days trading horizon Altus Group Limited is expected to generate 2.08 times more return on investment than Accord Financial. However, Altus Group is 2.08 times more volatile than Accord Financial Corp. It trades about 0.36 of its potential returns per unit of risk. Accord Financial Corp is currently generating about -0.08 per unit of risk. If you would invest 5,321 in Altus Group Limited on September 4, 2024 and sell it today you would earn a total of 661.00 from holding Altus Group Limited or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altus Group Limited vs. Accord Financial Corp
Performance |
| Timeline |
| Altus Group Limited |
| Accord Financial Corp |
Altus Group and Accord Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altus Group and Accord Financial
The main advantage of trading using opposite Altus Group and Accord Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Group position performs unexpectedly, Accord Financial 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 Accord Financial will offset losses from the drop in Accord Financial's long position.| Altus Group vs. Colliers International Group | Altus Group vs. FirstService Corp | Altus Group vs. Winpak | Altus Group vs. Ritchie Bros Auctioneers |
| Accord Financial vs. Algoma Central | Accord Financial vs. Chesswood Group Limited | Accord Financial vs. Clairvest Group | Accord Financial vs. Clarke 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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