Correlation Between Accenture Plc and Marsh McLennan
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and Marsh McLennan 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 Marsh McLennan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and Marsh McLennan Companies, you can compare the effects of market volatilities on Accenture Plc and Marsh McLennan 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 Marsh McLennan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Marsh McLennan.
Diversification Opportunities for Accenture Plc and Marsh McLennan
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Accenture and Marsh is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Marsh McLennan Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsh McLennan Companies 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 Marsh McLennan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsh McLennan Companies has no effect on the direction of Accenture Plc i.e., Accenture Plc and Marsh McLennan go up and down completely randomly.
Pair Corralation between Accenture Plc and Marsh McLennan
Considering the 90-day investment horizon Accenture plc is expected to under-perform the Marsh McLennan. In addition to that, Accenture Plc is 1.23 times more volatile than Marsh McLennan Companies. It trades about -0.26 of its total potential returns per unit of risk. Marsh McLennan Companies is currently generating about -0.03 per unit of volatility. If you would invest 20,266 in Marsh McLennan Companies on January 26, 2024 and sell it today you would lose (171.00) from holding Marsh McLennan Companies or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Accenture plc vs. Marsh McLennan Companies
Performance |
| Timeline |
| Accenture plc |
| Marsh McLennan Companies |
Accenture Plc and Marsh McLennan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and Marsh McLennan
The main advantage of trading using opposite Accenture Plc and Marsh McLennan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, Marsh McLennan 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 Marsh McLennan will offset losses from the drop in Marsh McLennan's long position.| Accenture Plc vs. FiscalNote Holdings | Accenture Plc vs. Innodata | Accenture Plc vs. Aurora Innovation | Accenture Plc vs. Conduent |
| Marsh McLennan vs. Arthur J Gallagher | Marsh McLennan vs. Willis Towers Watson | Marsh McLennan vs. Erie Indemnity | Marsh McLennan vs. Aon PLC |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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