Correlation Between Accenture Plc and Moderna

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

By analyzing existing cross correlation between Accenture plc and Moderna, you can compare the effects of market volatilities on Accenture Plc and Moderna 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 Moderna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Moderna.

Diversification Opportunities for Accenture Plc and Moderna

-0.74

Correlation Coefficient

Accenture Plc  Moderna

Pay attention - limited upside

The 3 months correlation between Accenture and Moderna is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna 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 Moderna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderna has no effect on the direction of Accenture Plc i.e., Accenture Plc and Moderna go up and down completely randomly.

Pair Corralation between Accenture Plc and Moderna

Assuming the 90 days trading horizon Accenture plc is expected to generate 0.53 times more return on investment than Moderna. However, Accenture plc is 1.89 times less risky than Moderna. It trades about 0.06 of its potential returns per unit of risk. Moderna is currently generating about -0.06 per unit of risk. If you would invest  143,354  in Accenture plc on September 24, 2024 and sell it today you would earn a total of  80,397  from holding Accenture plc or generate 56.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	92.02%
Values	Daily Returns

Accenture plc  vs.  Moderna

Accenture plc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Accenture plc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Accenture Plc sustained solid returns over the last few months and may actually be approaching a breakup point.

Moderna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moderna has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Accenture Plc and Moderna

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

The idea behind Accenture plc and Moderna 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.