Correlation Between Suburban Propane and Acco Brands
Can any of the company-specific risk be diversified away by investing in both Suburban Propane 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 Suburban Propane and Acco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suburban Propane Partners and Acco Brands, you can compare the effects of market volatilities on Suburban Propane 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 Suburban Propane with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and Acco Brands.
Diversification Opportunities for Suburban Propane and Acco Brands
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Suburban and Acco is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and Suburban Propane 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 Suburban Propane Partners 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 Suburban Propane i.e., Suburban Propane and Acco Brands go up and down completely randomly.
Pair Corralation between Suburban Propane and Acco Brands
Considering the 90-day investment horizon Suburban Propane is expected to generate 5.45 times less return on investment than Acco Brands. But when comparing it to its historical volatility, Suburban Propane Partners is 1.24 times less risky than Acco Brands. It trades about 0.02 of its potential returns per unit of risk. Acco Brands is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 490.00 in Acco Brands on September 1, 2024 and sell it today you would earn a total of 92.00 from holding Acco Brands or generate 18.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suburban Propane Partners vs. Acco Brands
Performance |
| Timeline |
| Suburban Propane Partners |
| Acco Brands |
Suburban Propane and Acco Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suburban Propane and Acco Brands
The main advantage of trading using opposite Suburban Propane and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane 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.| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. Atmos Energy | Suburban Propane vs. One Gas | Suburban Propane vs. NiSource |
| 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..
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