Correlation Between Aclaris Therapeutics and Sotera Health
Can any of the company-specific risk be diversified away by investing in both Aclaris Therapeutics and Sotera Health 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 Sotera Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aclaris Therapeutics and Sotera Health Co, you can compare the effects of market volatilities on Aclaris Therapeutics and Sotera Health 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 Sotera Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aclaris Therapeutics and Sotera Health.
Diversification Opportunities for Aclaris Therapeutics and Sotera Health
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aclaris and Sotera is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aclaris Therapeutics and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health 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 Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of Aclaris Therapeutics i.e., Aclaris Therapeutics and Sotera Health go up and down completely randomly.
Pair Corralation between Aclaris Therapeutics and Sotera Health
Given the investment horizon of 90 days Aclaris Therapeutics is expected to generate 2.32 times less return on investment than Sotera Health. In addition to that, Aclaris Therapeutics is 1.28 times more volatile than Sotera Health Co. It trades about 0.01 of its total potential returns per unit of risk. Sotera Health Co is currently generating about 0.03 per unit of volatility. If you would invest 1,362 in Sotera Health Co on November 3, 2024 and sell it today you would earn a total of 9.00 from holding Sotera Health Co or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aclaris Therapeutics vs. Sotera Health Co
Performance |
| Timeline |
| Aclaris Therapeutics |
| Sotera Health |
Aclaris Therapeutics and Sotera Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aclaris Therapeutics and Sotera Health
The main advantage of trading using opposite Aclaris Therapeutics and Sotera Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aclaris Therapeutics position performs unexpectedly, Sotera Health 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 Sotera Health will offset losses from the drop in Sotera Health's long position.| Aclaris Therapeutics vs. Neogen | Aclaris Therapeutics vs. Qiagen NV | Aclaris Therapeutics vs. Sotera Health Co | Aclaris Therapeutics vs. RadNet Inc |
| Sotera Health vs. Qiagen NV | Sotera Health vs. Aclaris Therapeutics | Sotera Health vs. Neogen | Sotera Health vs. RadNet 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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