Correlation Between Acumen Pharmaceuticals and Small Cap
Can any of the company-specific risk be diversified away by investing in both Acumen Pharmaceuticals and Small Cap 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 Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acumen Pharmaceuticals and Small Cap Premium, you can compare the effects of market volatilities on Acumen Pharmaceuticals and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acumen Pharmaceuticals and Small Cap.
Diversification Opportunities for Acumen Pharmaceuticals and Small Cap
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Acumen and Small is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Small Cap Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Premium 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Premium has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Small Cap go up and down completely randomly.
Pair Corralation between Acumen Pharmaceuticals and Small Cap
Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Small Cap. In addition to that, Acumen Pharmaceuticals is 9.68 times more volatile than Small Cap Premium. It trades about -0.04 of its total potential returns per unit of risk. Small Cap Premium is currently generating about 0.06 per unit of volatility. If you would invest 2,298 in Small Cap Premium on September 3, 2024 and sell it today you would earn a total of 162.00 from holding Small Cap Premium or generate 7.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acumen Pharmaceuticals vs. Small Cap Premium
Performance |
| Timeline |
| Acumen Pharmaceuticals |
| Small Cap Premium |
Acumen Pharmaceuticals and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acumen Pharmaceuticals and Small Cap
The main advantage of trading using opposite Acumen Pharmaceuticals and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acumen Pharmaceuticals position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Acumen Pharmaceuticals vs. Milestone Pharmaceuticals | Acumen Pharmaceuticals vs. Seres Therapeutics | Acumen Pharmaceuticals vs. DiaMedica Therapeutics | Acumen Pharmaceuticals vs. Lyra Therapeutics |
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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 Stocks Directory module to find actively traded stocks across global markets.
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