Correlation Between ACCSYS TECHPLC and Direct Line

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

By analyzing existing cross correlation between ACCSYS TECHPLC EO and Direct Line Insurance, you can compare the effects of market volatilities on ACCSYS TECHPLC and Direct Line 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 ACCSYS TECHPLC with a short position of Direct Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACCSYS TECHPLC and Direct Line.

Diversification Opportunities for ACCSYS TECHPLC and Direct Line

0.85

Correlation Coefficient

ACCSYS TECHPLC  Direct Line

Very poor diversification

The 3 months correlation between ACCSYS and Direct is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ACCSYS TECHPLC EO and Direct Line Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Line Insurance and ACCSYS TECHPLC 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 ACCSYS TECHPLC EO are associated (or correlated) with Direct Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Line Insurance has no effect on the direction of ACCSYS TECHPLC i.e., ACCSYS TECHPLC and Direct Line go up and down completely randomly.

Pair Corralation between ACCSYS TECHPLC and Direct Line

Assuming the 90 days horizon ACCSYS TECHPLC EO is expected to under-perform the Direct Line. In addition to that, ACCSYS TECHPLC is 5.99 times more volatile than Direct Line Insurance. It trades about -0.04 of its total potential returns per unit of risk. Direct Line Insurance is currently generating about 0.46 per unit of volatility. If you would invest  349.00  in Direct Line Insurance on April 14, 2025 and sell it today you would earn a total of  10.00  from holding Direct Line Insurance or generate 2.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	63.64%
Values	Daily Returns

ACCSYS TECHPLC EO  vs.  Direct Line Insurance

ACCSYS TECHPLC EO

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ACCSYS TECHPLC EO are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ACCSYS TECHPLC reported solid returns over the last few months and may actually be approaching a breakup point.

Direct Line Insurance

Risk-Adjusted Performance

Strong

Over the last 90 days Direct Line Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile essential indicators, Direct Line reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ACCSYS TECHPLC and Direct Line

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

The idea behind ACCSYS TECHPLC EO and Direct Line Insurance 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.