Correlation Between Acumen Pharmaceuticals and Coty
Can any of the company-specific risk be diversified away by investing in both Acumen Pharmaceuticals and Coty 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 Acumen Pharmaceuticals and Coty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acumen Pharmaceuticals and Coty Inc, you can compare the effects of market volatilities on Acumen Pharmaceuticals and Coty 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 Acumen Pharmaceuticals with a short position of Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acumen Pharmaceuticals and Coty.
Diversification Opportunities for Acumen Pharmaceuticals and Coty
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acumen and Coty is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc and Acumen Pharmaceuticals 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 Acumen Pharmaceuticals are associated (or correlated) with Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Coty go up and down completely randomly.
Pair Corralation between Acumen Pharmaceuticals and Coty
Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to generate 2.45 times more return on investment than Coty. However, Acumen Pharmaceuticals is 2.45 times more volatile than Coty Inc. It trades about -0.02 of its potential returns per unit of risk. Coty Inc is currently generating about -0.04 per unit of risk. If you would invest 431.00 in Acumen Pharmaceuticals on September 4, 2024 and sell it today you would lose (196.00) from holding Acumen Pharmaceuticals or give up 45.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acumen Pharmaceuticals vs. Coty Inc
Performance |
| Timeline |
| Acumen Pharmaceuticals |
| Coty Inc |
Acumen Pharmaceuticals and Coty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acumen Pharmaceuticals and Coty
The main advantage of trading using opposite Acumen Pharmaceuticals and Coty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acumen Pharmaceuticals position performs unexpectedly, Coty 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 Coty will offset losses from the drop in Coty's long position.| Acumen Pharmaceuticals vs. Candel Therapeutics | Acumen Pharmaceuticals vs. Cingulate Warrants | Acumen Pharmaceuticals vs. Unicycive Therapeutics | Acumen Pharmaceuticals vs. Cardio Diagnostics Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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