Correlation Between Acco Brands and Meta Data

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

By analyzing existing cross correlation between Acco Brands and Meta Data, you can compare the effects of market volatilities on Acco Brands and Meta Data 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 Meta Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Meta Data.

Diversification Opportunities for Acco Brands and Meta Data

0.9

Correlation Coefficient

Acco Brands  Meta Data

Almost no diversification

The 3 months correlation between Acco and Meta is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Meta Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Data 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 Meta Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Data has no effect on the direction of Acco Brands i.e., Acco Brands and Meta Data go up and down completely randomly.

Pair Corralation between Acco Brands and Meta Data

Given the investment horizon of 90 days Acco Brands is expected to generate 0.31 times more return on investment than Meta Data. However, Acco Brands is 3.18 times less risky than Meta Data. It trades about -0.2 of its potential returns per unit of risk. Meta Data is currently generating about -0.23 per unit of risk. If you would invest  523.00  in Acco Brands on February 5, 2024 and sell it today you would lose (35.00) from holding Acco Brands or give up 6.69% of portfolio value over 90 days.

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

Acco Brands  vs.  Meta Data

Acco Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acco Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Meta Data

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meta Data has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Acco Brands and Meta Data

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

The idea behind Acco Brands and Meta Data 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.