Correlation Between Accenture Plc and ITM Power
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and ITM Power 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 ITM Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and ITM Power Plc, you can compare the effects of market volatilities on Accenture Plc and ITM Power 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 ITM Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and ITM Power.
Diversification Opportunities for Accenture Plc and ITM Power
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Accenture and ITM is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and ITM Power Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Power Plc 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 ITM Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Power Plc has no effect on the direction of Accenture Plc i.e., Accenture Plc and ITM Power go up and down completely randomly.
Pair Corralation between Accenture Plc and ITM Power
Assuming the 90 days horizon Accenture plc is expected to generate 0.32 times more return on investment than ITM Power. However, Accenture plc is 3.13 times less risky than ITM Power. It trades about 0.05 of its potential returns per unit of risk. ITM Power Plc is currently generating about -0.03 per unit of risk. If you would invest 28,686 in Accenture plc on September 1, 2024 and sell it today you would earn a total of 5,799 from holding Accenture plc or generate 20.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accenture plc vs. ITM Power Plc
Performance |
| Timeline |
| Accenture plc |
| ITM Power Plc |
Accenture Plc and ITM Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and ITM Power
The main advantage of trading using opposite Accenture Plc and ITM Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, ITM Power 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 ITM Power will offset losses from the drop in ITM Power's long position.| Accenture Plc vs. SYSTEMAIR AB | Accenture Plc vs. HF SINCLAIR P | Accenture Plc vs. Motorcar Parts of | Accenture Plc vs. CarsalesCom |
| ITM Power vs. Nel ASA | ITM Power vs. Powercell Sweden | ITM Power vs. Ballard Power Systems | ITM Power vs. Plug Power |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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