Correlation Between Cheniere Energy and Acco Brands
Can any of the company-specific risk be diversified away by investing in both Cheniere Energy and Acco Brands 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 Cheniere Energy and Acco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheniere Energy Partners and Acco Brands, you can compare the effects of market volatilities on Cheniere Energy and Acco Brands 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 Cheniere Energy with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheniere Energy and Acco Brands.
Diversification Opportunities for Cheniere Energy and Acco Brands
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cheniere and Acco is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy Partners and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and Cheniere Energy 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 Cheniere Energy Partners are associated (or correlated) with Acco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acco Brands has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and Acco Brands go up and down completely randomly.
Pair Corralation between Cheniere Energy and Acco Brands
Considering the 90-day investment horizon Cheniere Energy is expected to generate 1.23 times less return on investment than Acco Brands. But when comparing it to its historical volatility, Cheniere Energy Partners is 2.03 times less risky than Acco Brands. It trades about 0.51 of its potential returns per unit of risk. Acco Brands is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 481.00 in Acco Brands on August 30, 2024 and sell it today you would earn a total of 100.00 from holding Acco Brands or generate 20.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheniere Energy Partners vs. Acco Brands
Performance |
| Timeline |
| Cheniere Energy Partners |
| Acco Brands |
Cheniere Energy and Acco Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheniere Energy and Acco Brands
The main advantage of trading using opposite Cheniere Energy and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheniere Energy position performs unexpectedly, Acco Brands 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 Acco Brands will offset losses from the drop in Acco Brands' long position.| Cheniere Energy vs. Antero Midstream Partners | Cheniere Energy vs. Excelerate Energy | Cheniere Energy vs. Energy Transfer LP | Cheniere Energy vs. Teekay |
| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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