Correlation Between Black Sea and Accel Solutions
Can any of the company-specific risk be diversified away by investing in both Black Sea and Accel Solutions 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 Black Sea and Accel Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Sea Property and Accel Solutions Group, you can compare the effects of market volatilities on Black Sea and Accel Solutions 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 Black Sea with a short position of Accel Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Sea and Accel Solutions.
Diversification Opportunities for Black Sea and Accel Solutions
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Black and Accel is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Black Sea Property and Accel Solutions Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accel Solutions Group and Black Sea 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 Black Sea Property are associated (or correlated) with Accel Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accel Solutions Group has no effect on the direction of Black Sea i.e., Black Sea and Accel Solutions go up and down completely randomly.
Pair Corralation between Black Sea and Accel Solutions
Assuming the 90 days trading horizon Black Sea Property is expected to generate 3.99 times more return on investment than Accel Solutions. However, Black Sea is 3.99 times more volatile than Accel Solutions Group. It trades about 0.03 of its potential returns per unit of risk. Accel Solutions Group is currently generating about 0.09 per unit of risk. If you would invest 67,060 in Black Sea Property on August 31, 2024 and sell it today you would lose (12,770) from holding Black Sea Property or give up 19.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
Black Sea Property vs. Accel Solutions Group
Performance |
| Timeline |
| Black Sea Property |
| Accel Solutions Group |
Black Sea and Accel Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Sea and Accel Solutions
The main advantage of trading using opposite Black Sea and Accel Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Sea position performs unexpectedly, Accel Solutions 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 Accel Solutions will offset losses from the drop in Accel Solutions' long position.| Black Sea vs. Nice | Black Sea vs. The Gold Bond | Black Sea vs. Bank Leumi Le Israel | Black Sea vs. ICL Israel Chemicals |
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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