Correlation Between Alphabet and Accor SA
Can any of the company-specific risk be diversified away by investing in both Alphabet and Accor SA 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 Alphabet and Accor SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Accor SA, you can compare the effects of market volatilities on Alphabet and Accor SA 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 Alphabet with a short position of Accor SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Accor SA.
Diversification Opportunities for Alphabet and Accor SA
Poor diversification
The 3 months correlation between Alphabet and Accor is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Accor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor SA and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Accor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor SA has no effect on the direction of Alphabet i.e., Alphabet and Accor SA go up and down completely randomly.
Pair Corralation between Alphabet and Accor SA
Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 1.14 times more return on investment than Accor SA. However, Alphabet is 1.14 times more volatile than Accor SA. It trades about 0.07 of its potential returns per unit of risk. Accor SA is currently generating about 0.06 per unit of risk. If you would invest 10,322 in Alphabet Inc Class C on August 27, 2024 and sell it today you would earn a total of 6,335 from holding Alphabet Inc Class C or generate 61.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Accor SA
Performance |
| Timeline |
| Alphabet Class C |
| Accor SA |
Alphabet and Accor SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Accor SA
The main advantage of trading using opposite Alphabet and Accor SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, Accor SA 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 Accor SA will offset losses from the drop in Accor SA's long position.The idea behind Alphabet Inc Class C and Accor SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Accor SA vs. Huazhu Group | Accor SA vs. GreenTree Hospitality Group | Accor SA vs. Soho House Co | Accor SA vs. InterContinental Hotels Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |