Correlation Between Acme United and Pear Therapeutics
Can any of the company-specific risk be diversified away by investing in both Acme United and Pear 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 Acme United and Pear Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acme United and Pear Therapeutics, you can compare the effects of market volatilities on Acme United and Pear 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 Acme United with a short position of Pear Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acme United and Pear Therapeutics.
Diversification Opportunities for Acme United and Pear Therapeutics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Acme and Pear is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Acme United and Pear Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Therapeutics and Acme United 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 Acme United are associated (or correlated) with Pear Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Therapeutics has no effect on the direction of Acme United i.e., Acme United and Pear Therapeutics go up and down completely randomly.
Pair Corralation between Acme United and Pear Therapeutics
If you would invest 3,545 in Acme United on September 1, 2024 and sell it today you would earn a total of 906.00 from holding Acme United or generate 25.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Acme United vs. Pear Therapeutics
Performance |
| Timeline |
| Acme United |
| Pear Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Acme United and Pear Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acme United and Pear Therapeutics
The main advantage of trading using opposite Acme United and Pear Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acme United position performs unexpectedly, Pear 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 Pear Therapeutics will offset losses from the drop in Pear Therapeutics' long position.| Acme United vs. Mannatech Incorporated | Acme United vs. European Wax Center | Acme United vs. Inter Parfums | Acme United vs. Spectrum Brands Holdings |
| Pear Therapeutics vs. MGIC Investment Corp | Pear Therapeutics vs. Aspen Insurance Holdings | Pear Therapeutics vs. Skillful Craftsman Education | Pear Therapeutics vs. Lindblad Expeditions 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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