Correlation Between Acco Brands and SEACOR Marine

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

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

Diversification Opportunities for Acco Brands and SEACOR Marine

-0.77

Correlation Coefficient

Acco Brands  SEACOR Marine

Pay attention - limited upside

The 3 months correlation between Acco and SEACOR is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and SEACOR Marine Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEACOR Marine Holdings 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 SEACOR Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEACOR Marine Holdings has no effect on the direction of Acco Brands i.e., Acco Brands and SEACOR Marine go up and down completely randomly.

Pair Corralation between Acco Brands and SEACOR Marine

Given the investment horizon of 90 days Acco Brands is expected to generate 1.19 times more return on investment than SEACOR Marine. However, Acco Brands is 1.19 times more volatile than SEACOR Marine Holdings. It trades about -0.09 of its potential returns per unit of risk. SEACOR Marine Holdings is currently generating about -0.14 per unit of risk. If you would invest  525.00  in Acco Brands on January 17, 2024 and sell it today you would lose (23.00) from holding Acco Brands or give up 4.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Acco Brands  vs.  SEACOR Marine Holdings

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 latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

SEACOR Marine Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SEACOR Marine Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, SEACOR Marine demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acco Brands and SEACOR Marine

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

The idea behind Acco Brands and SEACOR Marine Holdings 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.