Correlation Between Acumen Pharmaceuticals and Tscan Therapeutics

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

Diversification Opportunities for Acumen Pharmaceuticals and Tscan Therapeutics

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between Acumen and Tscan is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Tscan Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tscan Therapeutics 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 Tscan Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tscan Therapeutics has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Tscan Therapeutics go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and Tscan Therapeutics

Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Tscan Therapeutics. In addition to that, Acumen Pharmaceuticals is 1.07 times more volatile than Tscan Therapeutics. It trades about -0.15 of its total potential returns per unit of risk. Tscan Therapeutics is currently generating about -0.05 per unit of volatility. If you would invest  489.00  in Tscan Therapeutics on August 28, 2024 and sell it today you would lose (37.00) from holding Tscan Therapeutics or give up 7.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Acumen Pharmaceuticals  vs.  Tscan Therapeutics

 Performance 
       Timeline  
Acumen Pharmaceuticals 

Risk-Adjusted Performance

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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 latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
Tscan Therapeutics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Tscan Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Acumen Pharmaceuticals and Tscan Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Acumen Pharmaceuticals and Tscan Therapeutics

The main advantage of trading using opposite Acumen Pharmaceuticals and Tscan Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acumen Pharmaceuticals position performs unexpectedly, Tscan Therapeutics 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 Tscan Therapeutics will offset losses from the drop in Tscan Therapeutics' long position.
The idea behind Acumen Pharmaceuticals and Tscan Therapeutics 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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