Correlation Between Wipro Limited and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both Wipro Limited 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 Wipro Limited and Accenture Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wipro Limited ADR and Accenture plc, you can compare the effects of market volatilities on Wipro Limited 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 Wipro Limited with a short position of Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wipro Limited and Accenture Plc.
Diversification Opportunities for Wipro Limited and Accenture Plc
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wipro and Accenture is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Wipro Limited ADR and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc and Wipro Limited 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 Wipro Limited ADR 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 Wipro Limited i.e., Wipro Limited and Accenture Plc go up and down completely randomly.
Pair Corralation between Wipro Limited and Accenture Plc
Considering the 90-day investment horizon Wipro Limited ADR is expected to generate 1.35 times more return on investment than Accenture Plc. However, Wipro Limited is 1.35 times more volatile than Accenture plc. It trades about 0.06 of its potential returns per unit of risk. Accenture plc is currently generating about 0.04 per unit of risk. If you would invest 475.00 in Wipro Limited ADR on August 31, 2024 and sell it today you would earn a total of 224.00 from holding Wipro Limited ADR or generate 47.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wipro Limited ADR vs. Accenture plc
Performance |
| Timeline |
| Wipro Limited ADR |
| Accenture plc |
Wipro Limited and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wipro Limited and Accenture Plc
The main advantage of trading using opposite Wipro Limited and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wipro Limited 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.| Wipro Limited vs. Cognizant Technology Solutions | Wipro Limited vs. Accenture plc | Wipro Limited vs. Gartner | Wipro Limited vs. Infosys Ltd ADR |
| Accenture Plc vs. Globant SA | Accenture Plc vs. Concentrix | Accenture Plc vs. Cognizant Technology Solutions | Accenture Plc vs. CDW Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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