Correlation Between Accenture Plc and Volkswagen

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

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

Diversification Opportunities for Accenture Plc and Volkswagen

0.62

Correlation Coefficient

Accenture Plc  Volkswagen

Poor diversification

The 3 months correlation between Accenture and Volkswagen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of Accenture Plc i.e., Accenture Plc and Volkswagen go up and down completely randomly.

Pair Corralation between Accenture Plc and Volkswagen

Assuming the 90 days horizon Accenture plc is expected to under-perform the Volkswagen. In addition to that, Accenture Plc is 1.11 times more volatile than Volkswagen AG. It trades about -0.05 of its total potential returns per unit of risk. Volkswagen AG is currently generating about -0.01 per unit of volatility. If you would invest  9,115  in Volkswagen AG on April 24, 2025 and sell it today you would lose (109.00) from holding Volkswagen AG or give up 1.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Accenture plc  vs.  Volkswagen AG

Accenture plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Accenture plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Accenture Plc is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Volkswagen AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Volkswagen AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Volkswagen is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Accenture Plc and Volkswagen

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

The idea behind Accenture plc and Volkswagen AG 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.