Correlation Between Accelerate OneChoice and Accelerate Canadian
Can any of the company-specific risk be diversified away by investing in both Accelerate OneChoice and Accelerate Canadian 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 Accelerate OneChoice and Accelerate Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accelerate OneChoice Alternative and Accelerate Canadian Long, you can compare the effects of market volatilities on Accelerate OneChoice and Accelerate Canadian 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 Accelerate OneChoice with a short position of Accelerate Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accelerate OneChoice and Accelerate Canadian.
Diversification Opportunities for Accelerate OneChoice and Accelerate Canadian
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Accelerate and Accelerate is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Accelerate OneChoice Alternati and Accelerate Canadian Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Canadian Long and Accelerate OneChoice 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 Accelerate OneChoice Alternative are associated (or correlated) with Accelerate Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Canadian Long has no effect on the direction of Accelerate OneChoice i.e., Accelerate OneChoice and Accelerate Canadian go up and down completely randomly.
Pair Corralation between Accelerate OneChoice and Accelerate Canadian
Assuming the 90 days trading horizon Accelerate OneChoice is expected to generate 4.54 times less return on investment than Accelerate Canadian. But when comparing it to its historical volatility, Accelerate OneChoice Alternative is 1.48 times less risky than Accelerate Canadian. It trades about 0.11 of its potential returns per unit of risk. Accelerate Canadian Long is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 2,559 in Accelerate Canadian Long on August 29, 2024 and sell it today you would earn a total of 130.00 from holding Accelerate Canadian Long or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accelerate OneChoice Alternati vs. Accelerate Canadian Long
Performance |
| Timeline |
| Accelerate OneChoice |
| Accelerate Canadian Long |
Accelerate OneChoice and Accelerate Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accelerate OneChoice and Accelerate Canadian
The main advantage of trading using opposite Accelerate OneChoice and Accelerate Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accelerate OneChoice position performs unexpectedly, Accelerate Canadian 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 Accelerate Canadian will offset losses from the drop in Accelerate Canadian's long position.| Accelerate OneChoice vs. Accelerate Arbitrage | Accelerate OneChoice vs. Accelerate Absolute Return | Accelerate OneChoice vs. NBI High Yield | Accelerate OneChoice vs. NBI Unconstrained Fixed |
| Accelerate Canadian vs. Accelerate Absolute Return | Accelerate Canadian vs. Accelerate Arbitrage | Accelerate Canadian vs. Accelerate OneChoice Alternative | Accelerate Canadian vs. First Trust AlphaDEX |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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