Correlation Between Accenture Plc and Apple

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Can any of the company-specific risk be diversified away by investing in both Accenture Plc and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture Plc and Apple Inc, you can compare the effects of market volatilities on Accenture Plc and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Apple.

Diversification Opportunities for Accenture Plc and Apple

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Accenture and Apple is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Accenture Plc and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Accenture Plc i.e., Accenture Plc and Apple go up and down completely randomly.

Pair Corralation between Accenture Plc and Apple

Considering the 90-day investment horizon Accenture Plc is expected to generate 0.63 times more return on investment than Apple. However, Accenture Plc is 1.6 times less risky than Apple. It trades about -0.3 of its potential returns per unit of risk. Apple Inc is currently generating about -0.24 per unit of risk. If you would invest  28,407  in Accenture Plc on July 4, 2022 and sell it today you would lose (2,677)  from holding Accenture Plc or give up 9.42% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.45%
ValuesDaily Returns

Accenture Plc  vs.  Apple Inc

 Performance (%) 
       Timeline  
Accenture Plc 
Accenture Performance
0 of 100
Over the last 90 days Accenture Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Accenture Plc is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Accenture Price Channel

Apple Inc 
Apple Performance
0 of 100
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Apple is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Apple Price Channel

Accenture Plc and Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Accenture Plc and Apple

The main advantage of trading using opposite Accenture Plc and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.
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The idea behind Accenture Plc and Apple 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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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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