Correlation Between Accenture Plc and CenterPoint Energy
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and CenterPoint 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 CenterPoint 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 CenterPoint Energy, you can compare the effects of market volatilities on Accenture Plc and CenterPoint 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 CenterPoint Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and CenterPoint Energy.
Diversification Opportunities for Accenture Plc and CenterPoint Energy
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Accenture and CenterPoint is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and CenterPoint Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CenterPoint 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 CenterPoint Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CenterPoint Energy has no effect on the direction of Accenture Plc i.e., Accenture Plc and CenterPoint Energy go up and down completely randomly.
Pair Corralation between Accenture Plc and CenterPoint Energy
Assuming the 90 days horizon Accenture plc is expected to under-perform the CenterPoint Energy. In addition to that, Accenture Plc is 1.06 times more volatile than CenterPoint Energy. It trades about -0.01 of its total potential returns per unit of risk. CenterPoint Energy is currently generating about 0.1 per unit of volatility. If you would invest 3,020 in CenterPoint Energy on November 30, 2024 and sell it today you would earn a total of 180.00 from holding CenterPoint Energy or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accenture plc vs. CenterPoint Energy
Performance |
| Timeline |
| Accenture plc |
| CenterPoint Energy |
Accenture Plc and CenterPoint Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and CenterPoint Energy
The main advantage of trading using opposite Accenture Plc and CenterPoint Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, CenterPoint 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 CenterPoint Energy will offset losses from the drop in CenterPoint Energy's long position.| Accenture Plc vs. EEDUCATION ALBERT AB | Accenture Plc vs. CAREER EDUCATION | Accenture Plc vs. ANTA Sports Products | Accenture Plc vs. G8 EDUCATION |
| CenterPoint Energy vs. UNIQA INSURANCE GR | CenterPoint Energy vs. Vienna Insurance Group | CenterPoint Energy vs. United Overseas Insurance | CenterPoint Energy vs. Commonwealth Bank of |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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