Correlation Between Accenture Plc and Information Services

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Can any of the company-specific risk be diversified away by investing in both Accenture Plc and Information Services 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 Accenture Plc and Information Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and Information Services Group, you can compare the effects of market volatilities on Accenture Plc and Information Services 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 Accenture Plc with a short position of Information Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Information Services.

Diversification Opportunities for Accenture Plc and Information Services

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Accenture and Information is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Information Services Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services and Accenture Plc 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 Accenture plc are associated (or correlated) with Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of Accenture Plc i.e., Accenture Plc and Information Services go up and down completely randomly.

Pair Corralation between Accenture Plc and Information Services

Considering the 90-day investment horizon Accenture plc is expected to generate 1.12 times more return on investment than Information Services. However, Accenture Plc is 1.12 times more volatile than Information Services Group. It trades about 0.0 of its potential returns per unit of risk. Information Services Group is currently generating about -0.13 per unit of risk. If you would invest  36,129  in Accenture plc on September 25, 2024 and sell it today you would lose (111.50) from holding Accenture plc or give up 0.31% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Accenture plc  vs.  Information Services Group

 Performance 
       Timeline  
Accenture plc 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Accenture plc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Accenture Plc may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Information Services 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Information Services Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Information Services may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Accenture Plc and Information Services Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Accenture Plc and Information Services

The main advantage of trading using opposite Accenture Plc and Information Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, Information Services 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 Information Services will offset losses from the drop in Information Services' long position.
The idea behind Accenture plc and Information Services Group 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.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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