Correlation Between Accenture Plc and CDW
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and CDW 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 CDW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and CDW Corporation, you can compare the effects of market volatilities on Accenture Plc and CDW 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 CDW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and CDW.
Diversification Opportunities for Accenture Plc and CDW
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Accenture and CDW is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and CDW Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corporation 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 CDW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corporation has no effect on the direction of Accenture Plc i.e., Accenture Plc and CDW go up and down completely randomly.
Pair Corralation between Accenture Plc and CDW
Assuming the 90 days horizon Accenture plc is expected to generate 0.94 times more return on investment than CDW. However, Accenture plc is 1.07 times less risky than CDW. It trades about 0.05 of its potential returns per unit of risk. CDW Corporation is currently generating about 0.01 per unit of risk. If you would invest 25,878 in Accenture plc on November 5, 2024 and sell it today you would earn a total of 10,867 from holding Accenture plc or generate 41.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Accenture plc vs. CDW Corp.
Performance |
| Timeline |
| Accenture plc |
| CDW Corporation |
Accenture Plc and CDW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and CDW
The main advantage of trading using opposite Accenture Plc and CDW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, CDW 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 CDW will offset losses from the drop in CDW's long position.| Accenture Plc vs. UMC Electronics Co | Accenture Plc vs. TT Electronics PLC | Accenture Plc vs. ATOSS SOFTWARE | Accenture Plc vs. Kingdee International Software |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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