Correlation Between CDW and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both CDW and Accenture Plc 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 CDW and Accenture Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corporation and Accenture plc, you can compare the effects of market volatilities on CDW and Accenture Plc 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 CDW with a short position of Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW and Accenture Plc.
Diversification Opportunities for CDW and Accenture Plc
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CDW and Accenture is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp. and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc and CDW 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 CDW Corporation are associated (or correlated) with Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of CDW i.e., CDW and Accenture Plc go up and down completely randomly.
Pair Corralation between CDW and Accenture Plc
Assuming the 90 days horizon CDW Corporation is expected to under-perform the Accenture Plc. In addition to that, CDW is 1.19 times more volatile than Accenture plc. It trades about -0.08 of its total potential returns per unit of risk. Accenture plc is currently generating about 0.11 per unit of volatility. If you would invest 28,511 in Accenture plc on September 23, 2024 and sell it today you would earn a total of 6,619 from holding Accenture plc or generate 23.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp. vs. Accenture plc
Performance |
| Timeline |
| CDW Corporation |
| Accenture plc |
CDW and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW and Accenture Plc
The main advantage of trading using opposite CDW and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW position performs unexpectedly, Accenture Plc 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 Accenture Plc will offset losses from the drop in Accenture Plc's long position.| CDW vs. Accenture plc | CDW vs. International Business Machines | CDW vs. Infosys Limited | CDW vs. Cognizant Technology Solutions |
| Accenture Plc vs. International Business Machines | Accenture Plc vs. Infosys Limited | Accenture Plc vs. Cognizant Technology Solutions | Accenture Plc vs. AMADEUS IT GRP |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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