Correlation Between Acumen Pharmaceuticals and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both Acumen Pharmaceuticals and Synchrony Financial 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 Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acumen Pharmaceuticals and Synchrony Financial, you can compare the effects of market volatilities on Acumen Pharmaceuticals and Synchrony Financial 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 Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acumen Pharmaceuticals and Synchrony Financial.
Diversification Opportunities for Acumen Pharmaceuticals and Synchrony Financial
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Acumen and Synchrony is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial 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 Synchrony Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchrony Financial has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Synchrony Financial go up and down completely randomly.
Pair Corralation between Acumen Pharmaceuticals and Synchrony Financial
Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Synchrony Financial. In addition to that, Acumen Pharmaceuticals is 1.96 times more volatile than Synchrony Financial. It trades about -0.04 of its total potential returns per unit of risk. Synchrony Financial is currently generating about 0.12 per unit of volatility. If you would invest 4,578 in Synchrony Financial on September 3, 2024 and sell it today you would earn a total of 2,174 from holding Synchrony Financial or generate 47.49% 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. Synchrony Financial
Performance |
| Timeline |
| Acumen Pharmaceuticals |
| Synchrony Financial |
Acumen Pharmaceuticals and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acumen Pharmaceuticals and Synchrony Financial
The main advantage of trading using opposite Acumen Pharmaceuticals and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acumen Pharmaceuticals position performs unexpectedly, Synchrony Financial 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 Synchrony Financial will offset losses from the drop in Synchrony Financial's long position.| Acumen Pharmaceuticals vs. DiaMedica Therapeutics | Acumen Pharmaceuticals vs. Lyra Therapeutics | Acumen Pharmaceuticals vs. Centessa Pharmaceuticals PLC |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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