Correlation Between Aclaris Therapeutics and Castle Biosciences
Can any of the company-specific risk be diversified away by investing in both Aclaris Therapeutics and Castle Biosciences 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 Aclaris Therapeutics and Castle Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aclaris Therapeutics and Castle Biosciences, you can compare the effects of market volatilities on Aclaris Therapeutics and Castle Biosciences 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 Aclaris Therapeutics with a short position of Castle Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aclaris Therapeutics and Castle Biosciences.
Diversification Opportunities for Aclaris Therapeutics and Castle Biosciences
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aclaris and Castle is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Aclaris Therapeutics and Castle Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castle Biosciences and Aclaris 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 Aclaris Therapeutics are associated (or correlated) with Castle Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castle Biosciences has no effect on the direction of Aclaris Therapeutics i.e., Aclaris Therapeutics and Castle Biosciences go up and down completely randomly.
Pair Corralation between Aclaris Therapeutics and Castle Biosciences
Given the investment horizon of 90 days Aclaris Therapeutics is expected to generate 1.45 times less return on investment than Castle Biosciences. In addition to that, Aclaris Therapeutics is 1.37 times more volatile than Castle Biosciences. It trades about 0.02 of its total potential returns per unit of risk. Castle Biosciences is currently generating about 0.04 per unit of volatility. If you would invest 2,368 in Castle Biosciences on August 28, 2024 and sell it today you would earn a total of 583.00 from holding Castle Biosciences or generate 24.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aclaris Therapeutics vs. Castle Biosciences
Performance |
| Timeline |
| Aclaris Therapeutics |
| Castle Biosciences |
Aclaris Therapeutics and Castle Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aclaris Therapeutics and Castle Biosciences
The main advantage of trading using opposite Aclaris Therapeutics and Castle Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aclaris Therapeutics position performs unexpectedly, Castle Biosciences 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 Castle Biosciences will offset losses from the drop in Castle Biosciences' long position.| Aclaris Therapeutics vs. Neogen | Aclaris Therapeutics vs. Qiagen NV | Aclaris Therapeutics vs. Sotera Health Co | Aclaris Therapeutics vs. RadNet Inc |
| Castle Biosciences vs. Caredx Inc | Castle Biosciences vs. Twist Bioscience Corp | Castle Biosciences vs. Biodesix | Castle Biosciences vs. Natera Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |