Correlation Between Acco Brands and GDEV

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

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

Diversification Opportunities for Acco Brands and GDEV

0.2

Correlation Coefficient

Acco Brands  GDEV

Modest diversification

The 3 months correlation between Acco and GDEV is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and GDEV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDEV Inc 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 GDEV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDEV Inc has no effect on the direction of Acco Brands i.e., Acco Brands and GDEV go up and down completely randomly.

Pair Corralation between Acco Brands and GDEV

Given the investment horizon of 90 days Acco Brands is expected to generate 0.49 times more return on investment than GDEV. However, Acco Brands is 2.04 times less risky than GDEV. It trades about -0.01 of its potential returns per unit of risk. GDEV Inc is currently generating about -0.02 per unit of risk. If you would invest  661.00  in Acco Brands on February 5, 2024 and sell it today you would lose (173.00) from holding Acco Brands or give up 26.17% of portfolio value over 90 days.

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

Acco Brands  vs.  GDEV Inc

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.

GDEV Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GDEV Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, GDEV is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Acco Brands and GDEV

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

The idea behind Acco Brands and GDEV Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.