Correlation Between Acco Brands and International Consolidated

Can any of the company-specific risk be diversified away by investing in both Acco Brands and International Consolidated 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 Acco Brands and International Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Acco Brands and International Consolidated Companies, you can compare the effects of market volatilities on Acco Brands and International Consolidated 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 Acco Brands with a short position of International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and International Consolidated.

Diversification Opportunities for Acco Brands and International Consolidated

-0.55

Correlation Coefficient

Acco Brands  International Consolidated

Excellent diversification

The 3 months correlation between Acco and International is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and International Consolidated Com in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated and Acco Brands 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 Acco Brands are associated (or correlated) with International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Acco Brands i.e., Acco Brands and International Consolidated go up and down completely randomly.

Pair Corralation between Acco Brands and International Consolidated

Given the investment horizon of 90 days Acco Brands is expected to under-perform the International Consolidated. But the stock apears to be less risky and, when comparing its historical volatility, Acco Brands is 40.63 times less risky than International Consolidated. The stock trades about -0.17 of its potential returns per unit of risk. The International Consolidated Companies is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2.00  in International Consolidated Companies on September 23, 2024 and sell it today you would earn a total of  0.42  from holding International Consolidated Companies or generate 21.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Acco Brands  vs.  International Consolidated Com

Acco Brands

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Acco Brands are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Acco Brands is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

International Consolidated

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in International Consolidated Companies are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, International Consolidated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acco Brands and International Consolidated

The main advantage of trading using opposite Acco Brands and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.

The idea behind Acco Brands and International Consolidated Companies 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.

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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.