Correlation Between Acorda Therapeutics and Alimera Sciences
Can any of the company-specific risk be diversified away by investing in both Acorda Therapeutics and Alimera Sciences 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 Acorda Therapeutics and Alimera Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acorda Therapeutics and Alimera Sciences, you can compare the effects of market volatilities on Acorda Therapeutics and Alimera Sciences 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 Acorda Therapeutics with a short position of Alimera Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acorda Therapeutics and Alimera Sciences.
Diversification Opportunities for Acorda Therapeutics and Alimera Sciences
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acorda and Alimera is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Acorda Therapeutics and Alimera Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimera Sciences and Acorda Therapeutics 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 Acorda Therapeutics are associated (or correlated) with Alimera Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimera Sciences has no effect on the direction of Acorda Therapeutics i.e., Acorda Therapeutics and Alimera Sciences go up and down completely randomly.
Pair Corralation between Acorda Therapeutics and Alimera Sciences
Given the investment horizon of 90 days Acorda Therapeutics is expected to generate 1.43 times more return on investment than Alimera Sciences. However, Acorda Therapeutics is 1.43 times more volatile than Alimera Sciences. It trades about 0.06 of its potential returns per unit of risk. Alimera Sciences is currently generating about 0.05 per unit of risk. If you would invest 1,146 in Acorda Therapeutics on August 27, 2024 and sell it today you would earn a total of 474.00 from holding Acorda Therapeutics or generate 41.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 35.43% |
| Values | Daily Returns |
Acorda Therapeutics vs. Alimera Sciences
Performance |
| Timeline |
| Acorda Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alimera Sciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Acorda Therapeutics and Alimera Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acorda Therapeutics and Alimera Sciences
The main advantage of trading using opposite Acorda Therapeutics and Alimera Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acorda Therapeutics position performs unexpectedly, Alimera Sciences 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 Alimera Sciences will offset losses from the drop in Alimera Sciences' long position.| Acorda Therapeutics vs. Shionogi Co | Acorda Therapeutics vs. Pacira BioSciences, | Acorda Therapeutics vs. Sunshine Biopharma Warrant | Acorda Therapeutics vs. Biofrontera |
| Alimera Sciences vs. Shuttle Pharmaceuticals | Alimera Sciences vs. Lifecore Biomedical | Alimera Sciences vs. Journey Medical Corp | Alimera Sciences vs. Organogenesis Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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