Correlation Between Summit Environmental and Acco Brands

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Can any of the company-specific risk be diversified away by investing in both Summit Environmental 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 Summit Environmental and Acco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Environmental and Acco Brands, you can compare the effects of market volatilities on Summit Environmental 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 Summit Environmental with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Environmental and Acco Brands.

Diversification Opportunities for Summit Environmental and Acco Brands

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Summit and Acco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Summit Environmental and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and Summit Environmental 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 Summit Environmental 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 Summit Environmental i.e., Summit Environmental and Acco Brands go up and down completely randomly.

Pair Corralation between Summit Environmental and Acco Brands

If you would invest  481.00  in Acco Brands on August 30, 2024 and sell it today you would earn a total of  100.00  from holding Acco Brands or generate 20.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Summit Environmental  vs.  Acco Brands

 Performance 
       Timeline  
Summit Environmental 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Summit Environmental has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Summit Environmental is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
Acco Brands 

Risk-Adjusted Performance

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Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Acco Brands are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Acco Brands may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Summit Environmental and Acco Brands Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Summit Environmental and Acco Brands

The main advantage of trading using opposite Summit Environmental and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Environmental 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.
The idea behind Summit Environmental and Acco Brands pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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