Correlation Between WEG SA and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both WEG SA and Accenture Plc 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 WEG SA and Accenture Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WEG SA and Accenture plc, you can compare the effects of market volatilities on WEG SA and Accenture Plc 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 WEG SA with a short position of Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEG SA and Accenture Plc.
Diversification Opportunities for WEG SA and Accenture Plc
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WEG and Accenture is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding WEG SA and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc and WEG SA 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 WEG SA are associated (or correlated) with Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of WEG SA i.e., WEG SA and Accenture Plc go up and down completely randomly.
Pair Corralation between WEG SA and Accenture Plc
Assuming the 90 days trading horizon WEG SA is expected to generate 1.16 times less return on investment than Accenture Plc. But when comparing it to its historical volatility, WEG SA is 1.12 times less risky than Accenture Plc. It trades about 0.06 of its potential returns per unit of risk. Accenture plc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 142,284 in Accenture plc on October 13, 2024 and sell it today you would earn a total of 72,316 from holding Accenture plc or generate 50.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.14% |
| Values | Daily Returns |
WEG SA vs. Accenture plc
Performance |
| Timeline |
| WEG SA |
| Accenture plc |
WEG SA and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEG SA and Accenture Plc
The main advantage of trading using opposite WEG SA and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEG SA position performs unexpectedly, Accenture Plc 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 Accenture Plc will offset losses from the drop in Accenture Plc's long position.The idea behind WEG SA and Accenture plc 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.| Accenture Plc vs. TechnipFMC plc | Accenture Plc vs. GX AI TECH | Accenture Plc vs. Check Point Software | Accenture Plc vs. United Airlines Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |