Correlation Between Concentrix and Accenture Plc

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

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

Diversification Opportunities for Concentrix and Accenture Plc

-0.66

Correlation Coefficient

Concentrix  Accenture Plc

Excellent diversification

The 3 months correlation between Concentrix and Accenture is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Concentrix and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc and Concentrix 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 Concentrix 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 Concentrix i.e., Concentrix and Accenture Plc go up and down completely randomly.

Pair Corralation between Concentrix and Accenture Plc

Given the investment horizon of 90 days Concentrix is expected to under-perform the Accenture Plc. In addition to that, Concentrix is 2.34 times more volatile than Accenture plc. It trades about -0.21 of its total potential returns per unit of risk. Accenture plc is currently generating about 0.07 per unit of volatility. If you would invest  34,056  in Accenture plc on August 30, 2024 and sell it today you would earn a total of  2,160  from holding Accenture plc or generate 6.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Concentrix  vs.  Accenture plc

Concentrix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concentrix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Accenture plc

Risk-Adjusted Performance

5 of 100

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 weak fundamental indicators, Accenture Plc may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Concentrix and Accenture Plc

The main advantage of trading using opposite Concentrix and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concentrix 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 Concentrix 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.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.