Correlation Between Aecom Technology and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both Aecom Technology 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 Aecom Technology and Accenture Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aecom Technology and Accenture plc, you can compare the effects of market volatilities on Aecom Technology 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 Aecom Technology with a short position of Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aecom Technology and Accenture Plc.
Diversification Opportunities for Aecom Technology and Accenture Plc
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aecom and Accenture is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aecom Technology and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc and Aecom Technology 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 Aecom Technology 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 Aecom Technology i.e., Aecom Technology and Accenture Plc go up and down completely randomly.
Pair Corralation between Aecom Technology and Accenture Plc
Considering the 90-day investment horizon Aecom Technology is expected to generate 0.67 times more return on investment than Accenture Plc. However, Aecom Technology is 1.49 times less risky than Accenture Plc. It trades about 0.05 of its potential returns per unit of risk. Accenture plc is currently generating about -0.16 per unit of risk. If you would invest 8,996 in Aecom Technology on February 12, 2024 and sell it today you would earn a total of 309.00 from holding Aecom Technology or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aecom Technology vs. Accenture plc
Performance |
| Timeline |
| Aecom Technology |
| Accenture plc |
Aecom Technology and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aecom Technology and Accenture Plc
The main advantage of trading using opposite Aecom Technology and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aecom Technology 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.| Aecom Technology vs. EMCOR Group | Aecom Technology vs. Comfort Systems USA | Aecom Technology vs. Primoris Services | Aecom Technology vs. Granite Construction Incorporated |
| Accenture Plc vs. Science Applications International | Accenture Plc vs. CLARIVATE PLC | Accenture Plc vs. ASGN Inc | Accenture Plc vs. CACI International |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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