Correlation Between Acumen Pharmaceuticals and Grocery Outlet

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

Diversification Opportunities for Acumen Pharmaceuticals and Grocery Outlet

0.02
  Correlation Coefficient

Significant diversification

The 3 months correlation between Acumen and Grocery is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Grocery Outlet Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grocery Outlet Holding 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 Grocery Outlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grocery Outlet Holding has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Grocery Outlet go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and Grocery Outlet

Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Grocery Outlet. In addition to that, Acumen Pharmaceuticals is 1.06 times more volatile than Grocery Outlet Holding. It trades about -0.1 of its total potential returns per unit of risk. Grocery Outlet Holding is currently generating about 0.12 per unit of volatility. If you would invest  1,672  in Grocery Outlet Holding on August 24, 2024 and sell it today you would earn a total of  193.00  from holding Grocery Outlet Holding or generate 11.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Acumen Pharmaceuticals  vs.  Grocery Outlet Holding

 Performance 
       Timeline  
Acumen Pharmaceuticals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Acumen Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Grocery Outlet Holding 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Grocery Outlet Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Grocery Outlet may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Acumen Pharmaceuticals and Grocery Outlet Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Acumen Pharmaceuticals and Grocery Outlet

The main advantage of trading using opposite Acumen Pharmaceuticals and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acumen Pharmaceuticals position performs unexpectedly, Grocery Outlet 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 Grocery Outlet will offset losses from the drop in Grocery Outlet's long position.
The idea behind Acumen Pharmaceuticals and Grocery Outlet Holding 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.

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