Correlation Between Innovative Solutions and Acco Brands
Can any of the company-specific risk be diversified away by investing in both Innovative Solutions 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 Innovative Solutions and Acco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovative Solutions and and Acco Brands, you can compare the effects of market volatilities on Innovative Solutions 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 Innovative Solutions with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Solutions and Acco Brands.
Diversification Opportunities for Innovative Solutions and Acco Brands
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innovative and Acco is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Solutions and and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and Innovative Solutions 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 Innovative Solutions and 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 Innovative Solutions i.e., Innovative Solutions and Acco Brands go up and down completely randomly.
Pair Corralation between Innovative Solutions and Acco Brands
Given the investment horizon of 90 days Innovative Solutions is expected to generate 2.24 times less return on investment than Acco Brands. In addition to that, Innovative Solutions is 1.21 times more volatile than Acco Brands. It trades about 0.01 of its total potential returns per unit of risk. Acco Brands is currently generating about 0.02 per unit of volatility. If you would invest 515.00 in Acco Brands on August 29, 2024 and sell it today you would earn a total of 71.00 from holding Acco Brands or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Solutions and vs. Acco Brands
Performance |
| Timeline |
| Innovative Solutions and |
| Acco Brands |
Innovative Solutions and Acco Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Solutions and Acco Brands
The main advantage of trading using opposite Innovative Solutions and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Solutions 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.| Innovative Solutions vs. Sidus Space | Innovative Solutions vs. Rocket Lab USA | Innovative Solutions vs. Momentus | Innovative Solutions vs. Planet Labs PBC |
| Acco Brands vs. Park Electrochemical | Acco Brands vs. Innovative Solutions and | Acco Brands vs. Curtiss Wright | Acco Brands vs. National Presto Industries |
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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