Correlation Between BBB Foods and Acco Brands
Can any of the company-specific risk be diversified away by investing in both BBB Foods 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 BBB Foods and Acco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BBB Foods and Acco Brands, you can compare the effects of market volatilities on BBB Foods 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 BBB Foods with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBB Foods and Acco Brands.
Diversification Opportunities for BBB Foods and Acco Brands
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BBB and Acco is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding BBB Foods and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and BBB Foods 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 BBB Foods 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 BBB Foods i.e., BBB Foods and Acco Brands go up and down completely randomly.
Pair Corralation between BBB Foods and Acco Brands
Given the investment horizon of 90 days BBB Foods is expected to generate 1.42 times more return on investment than Acco Brands. However, BBB Foods is 1.42 times more volatile than Acco Brands. It trades about 0.09 of its potential returns per unit of risk. Acco Brands is currently generating about 0.04 per unit of risk. If you would invest 1,750 in BBB Foods on September 3, 2024 and sell it today you would earn a total of 1,034 from holding BBB Foods or generate 59.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 83.4% |
| Values | Daily Returns |
BBB Foods vs. Acco Brands
Performance |
| Timeline |
| BBB Foods |
| Acco Brands |
BBB Foods and Acco Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBB Foods and Acco Brands
The main advantage of trading using opposite BBB Foods and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBB Foods 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.| BBB Foods vs. NetSol Technologies | BBB Foods vs. Analog Devices | BBB Foods vs. FARO Technologies | BBB Foods vs. Getty Images Holdings |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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