Correlation Between Information Services and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both Information Services and Accenture Plc 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 Information Services and Accenture Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Services Group and Accenture plc, you can compare the effects of market volatilities on Information Services and Accenture Plc 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 Information Services with a short position of Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Services and Accenture Plc.
Diversification Opportunities for Information Services and Accenture Plc
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Information and Accenture is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Information Services Group and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc and Information Services 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 Information Services Group are associated (or correlated) with Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of Information Services i.e., Information Services and Accenture Plc go up and down completely randomly.
Pair Corralation between Information Services and Accenture Plc
Considering the 90-day investment horizon Information Services Group is expected to under-perform the Accenture Plc. In addition to that, Information Services is 1.46 times more volatile than Accenture plc. It trades about -0.01 of its total potential returns per unit of risk. Accenture plc is currently generating about 0.05 per unit of volatility. If you would invest 26,521 in Accenture plc on September 29, 2024 and sell it today you would earn a total of 9,097 from holding Accenture plc or generate 34.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information Services Group vs. Accenture plc
Performance |
| Timeline |
| Information Services |
| Accenture plc |
Information Services and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information Services and Accenture Plc
The main advantage of trading using opposite Information Services and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Services position performs unexpectedly, Accenture Plc 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 Accenture Plc will offset losses from the drop in Accenture Plc's long position.| Information Services vs. Network 1 Technologies | Information Services vs. First Advantage Corp | Information Services vs. BrightView Holdings | Information Services vs. Civeo Corp |
| Accenture Plc vs. Globant SA | Accenture Plc vs. Concentrix | Accenture Plc vs. Cognizant Technology Solutions | Accenture Plc vs. CDW Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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