Correlation Between Accenture Plc and Commerzbank
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and Commerzbank 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 Commerzbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and Commerzbank AG, you can compare the effects of market volatilities on Accenture Plc and Commerzbank 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 Commerzbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Commerzbank.
Diversification Opportunities for Accenture Plc and Commerzbank
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Accenture and Commerzbank is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Commerzbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerzbank AG 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 Commerzbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerzbank AG has no effect on the direction of Accenture Plc i.e., Accenture Plc and Commerzbank go up and down completely randomly.
Pair Corralation between Accenture Plc and Commerzbank
Assuming the 90 days horizon Accenture plc is expected to generate 0.65 times more return on investment than Commerzbank. However, Accenture plc is 1.55 times less risky than Commerzbank. It trades about 0.16 of its potential returns per unit of risk. Commerzbank AG is currently generating about -0.01 per unit of risk. If you would invest 25,643 in Accenture plc on August 29, 2024 and sell it today you would earn a total of 8,672 from holding Accenture plc or generate 33.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accenture plc vs. Commerzbank AG
Performance |
| Timeline |
| Accenture plc |
| Commerzbank AG |
Accenture Plc and Commerzbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and Commerzbank
The main advantage of trading using opposite Accenture Plc and Commerzbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, Commerzbank 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 Commerzbank will offset losses from the drop in Commerzbank's long position.| Accenture Plc vs. PICKN PAY STORES | Accenture Plc vs. AEON STORES | Accenture Plc vs. SINGAPORE AIRLINES | Accenture Plc vs. Aegean Airlines SA |
| Commerzbank vs. BNP Paribas SA | Commerzbank vs. Deutsche Bank Aktiengesellschaft | Commerzbank vs. Santander Bank Polska |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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