Correlation Between Acumen Pharmaceuticals and Micron Technology
Can any of the company-specific risk be diversified away by investing in both Acumen Pharmaceuticals and Micron Technology 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 Micron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acumen Pharmaceuticals and Micron Technology, you can compare the effects of market volatilities on Acumen Pharmaceuticals and Micron Technology 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 Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acumen Pharmaceuticals and Micron Technology.
Diversification Opportunities for Acumen Pharmaceuticals and Micron Technology
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acumen and Micron is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology 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 Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Micron Technology go up and down completely randomly.
Pair Corralation between Acumen Pharmaceuticals and Micron Technology
Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Micron Technology. In addition to that, Acumen Pharmaceuticals is 2.2 times more volatile than Micron Technology. It trades about 0.0 of its total potential returns per unit of risk. Micron Technology is currently generating about 0.06 per unit of volatility. If you would invest 5,303 in Micron Technology on August 27, 2024 and sell it today you would earn a total of 4,961 from holding Micron Technology or generate 93.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acumen Pharmaceuticals vs. Micron Technology
Performance |
| Timeline |
| Acumen Pharmaceuticals |
| Micron Technology |
Acumen Pharmaceuticals and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acumen Pharmaceuticals and Micron Technology
The main advantage of trading using opposite Acumen Pharmaceuticals and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acumen Pharmaceuticals position performs unexpectedly, Micron Technology 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 Micron Technology will offset losses from the drop in Micron Technology's long position.| Acumen Pharmaceuticals vs. Terns Pharmaceuticals | Acumen Pharmaceuticals vs. X4 Pharmaceuticals | Acumen Pharmaceuticals vs. Day One Biopharmaceuticals | Acumen Pharmaceuticals vs. Hookipa Pharma |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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