Correlation Between NL Industries and Acco Brands
Can any of the company-specific risk be diversified away by investing in both NL Industries 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 NL Industries and Acco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NL Industries and Acco Brands, you can compare the effects of market volatilities on NL Industries 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 NL Industries with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of NL Industries and Acco Brands.
Diversification Opportunities for NL Industries and Acco Brands
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NL Industries and Acco is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding NL Industries and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and NL Industries 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 NL Industries 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 NL Industries i.e., NL Industries and Acco Brands go up and down completely randomly.
Pair Corralation between NL Industries and Acco Brands
Allowing for the 90-day total investment horizon NL Industries is expected to generate 12.15 times less return on investment than Acco Brands. In addition to that, NL Industries is 1.32 times more volatile than Acco Brands. It trades about 0.02 of its total potential returns per unit of risk. Acco Brands is currently generating about 0.29 per unit of volatility. If you would invest 488.00 in Acco Brands on August 29, 2024 and sell it today you would earn a total of 98.00 from holding Acco Brands or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NL Industries vs. Acco Brands
Performance |
| Timeline |
| NL Industries |
| Acco Brands |
NL Industries and Acco Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NL Industries and Acco Brands
The main advantage of trading using opposite NL Industries and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NL Industries 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.| NL Industries vs. Brinks Company | NL Industries vs. Allegion PLC | NL Industries vs. Resideo Technologies | NL Industries vs. Mistras 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |