Correlation Between New Horizon and Acco Brands
Can any of the company-specific risk be diversified away by investing in both New Horizon and Acco Brands 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 New Horizon and Acco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Horizon Aircraft and Acco Brands, you can compare the effects of market volatilities on New Horizon and Acco Brands 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 New Horizon with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Horizon and Acco Brands.
Diversification Opportunities for New Horizon and Acco Brands
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between New and Acco is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding New Horizon Aircraft and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and New Horizon 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 New Horizon Aircraft are associated (or correlated) with Acco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acco Brands has no effect on the direction of New Horizon i.e., New Horizon and Acco Brands go up and down completely randomly.
Pair Corralation between New Horizon and Acco Brands
Given the investment horizon of 90 days New Horizon Aircraft is expected to under-perform the Acco Brands. In addition to that, New Horizon is 3.97 times more volatile than Acco Brands. It trades about -0.03 of its total potential returns per unit of risk. Acco Brands is currently generating about 0.03 per unit of volatility. If you would invest 495.00 in Acco Brands on September 12, 2024 and sell it today you would earn a total of 124.00 from holding Acco Brands or generate 25.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.26% |
| Values | Daily Returns |
New Horizon Aircraft vs. Acco Brands
Performance |
| Timeline |
| New Horizon Aircraft |
| Acco Brands |
New Horizon and Acco Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Horizon and Acco Brands
The main advantage of trading using opposite New Horizon and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Horizon position performs unexpectedly, Acco Brands 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 Acco Brands will offset losses from the drop in Acco Brands' long position.| New Horizon vs. Cracker Barrel Old | New Horizon vs. Dominos Pizza | New Horizon vs. SEI Investments | New Horizon vs. Rave Restaurant Group |
| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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