Correlation Between Accenture Plc and BlackBerry

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

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

Diversification Opportunities for Accenture Plc and BlackBerry

-0.06

Correlation Coefficient

Accenture Plc  BlackBerry

Good diversification

The 3 months correlation between Accenture and BlackBerry is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and BlackBerry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackBerry 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 BlackBerry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackBerry has no effect on the direction of Accenture Plc i.e., Accenture Plc and BlackBerry go up and down completely randomly.

Pair Corralation between Accenture Plc and BlackBerry

Considering the 90-day investment horizon Accenture plc is expected to under-perform the BlackBerry. But the stock apears to be less risky and, when comparing its historical volatility, Accenture plc is 2.78 times less risky than BlackBerry. The stock trades about -0.18 of its potential returns per unit of risk. The BlackBerry is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  264.00  in BlackBerry on January 24, 2024 and sell it today you would earn a total of  16.00  from holding BlackBerry or generate 6.06% return on investment over 90 days.

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

Accenture plc  vs.  BlackBerry

Accenture plc

Risk-Adjusted Performance

0 of 100

Very Weak

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

BlackBerry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackBerry has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, BlackBerry is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Accenture Plc and BlackBerry

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

The idea behind Accenture plc and BlackBerry 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .