Correlation Between Accenture Plc and 2G ENERGY
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and 2G ENERGY 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 Accenture Plc and 2G ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and 2G ENERGY , you can compare the effects of market volatilities on Accenture Plc and 2G ENERGY 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 Accenture Plc with a short position of 2G ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and 2G ENERGY.
Diversification Opportunities for Accenture Plc and 2G ENERGY
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Accenture and 2GB is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and 2G ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2G ENERGY and Accenture Plc 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 Accenture plc are associated (or correlated) with 2G ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2G ENERGY has no effect on the direction of Accenture Plc i.e., Accenture Plc and 2G ENERGY go up and down completely randomly.
Pair Corralation between Accenture Plc and 2G ENERGY
Assuming the 90 days horizon Accenture plc is expected to generate 0.71 times more return on investment than 2G ENERGY. However, Accenture plc is 1.4 times less risky than 2G ENERGY. It trades about 0.01 of its potential returns per unit of risk. 2G ENERGY is currently generating about 0.01 per unit of risk. If you would invest 34,039 in Accenture plc on September 1, 2024 and sell it today you would earn a total of 446.00 from holding Accenture plc or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accenture plc vs. 2G ENERGY
Performance |
| Timeline |
| Accenture plc |
| 2G ENERGY |
Accenture Plc and 2G ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and 2G ENERGY
The main advantage of trading using opposite Accenture Plc and 2G ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, 2G ENERGY 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 2G ENERGY will offset losses from the drop in 2G ENERGY's long position.| Accenture Plc vs. SYSTEMAIR AB | Accenture Plc vs. HF SINCLAIR P | Accenture Plc vs. Motorcar Parts of | Accenture Plc vs. CarsalesCom |
| 2G ENERGY vs. Australian Agricultural | 2G ENERGY vs. Ultra Clean Holdings | 2G ENERGY vs. Charter Communications | 2G ENERGY vs. Consolidated Communications Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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