Correlation Between Akari Therapeutics and Cumberland Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Akari Therapeutics and Cumberland Pharmaceuticals 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 Akari Therapeutics and Cumberland Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akari Therapeutics PLC and Cumberland Pharmaceuticals, you can compare the effects of market volatilities on Akari Therapeutics and Cumberland Pharmaceuticals 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 Akari Therapeutics with a short position of Cumberland Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akari Therapeutics and Cumberland Pharmaceuticals.
Diversification Opportunities for Akari Therapeutics and Cumberland Pharmaceuticals
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Akari and Cumberland is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Akari Therapeutics PLC and Cumberland Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumberland Pharmaceuticals and Akari 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 Akari Therapeutics PLC are associated (or correlated) with Cumberland Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumberland Pharmaceuticals has no effect on the direction of Akari Therapeutics i.e., Akari Therapeutics and Cumberland Pharmaceuticals go up and down completely randomly.
Pair Corralation between Akari Therapeutics and Cumberland Pharmaceuticals
Given the investment horizon of 90 days Akari Therapeutics PLC is expected to generate 2.76 times more return on investment than Cumberland Pharmaceuticals. However, Akari Therapeutics is 2.76 times more volatile than Cumberland Pharmaceuticals. It trades about 0.0 of its potential returns per unit of risk. Cumberland Pharmaceuticals is currently generating about -0.09 per unit of risk. If you would invest 183.00 in Akari Therapeutics PLC on August 26, 2024 and sell it today you would lose (53.00) from holding Akari Therapeutics PLC or give up 28.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akari Therapeutics PLC vs. Cumberland Pharmaceuticals
Performance |
| Timeline |
| Akari Therapeutics PLC |
| Cumberland Pharmaceuticals |
Akari Therapeutics and Cumberland Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akari Therapeutics and Cumberland Pharmaceuticals
The main advantage of trading using opposite Akari Therapeutics and Cumberland Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akari Therapeutics position performs unexpectedly, Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals will offset losses from the drop in Cumberland Pharmaceuticals' long position.| Akari Therapeutics vs. Capricor Therapeutics | Akari Therapeutics vs. Soleno Therapeutics | Akari Therapeutics vs. Bio Path Holdings | Akari Therapeutics vs. Moleculin Biotech |
| Cumberland Pharmaceuticals vs. Capricor Therapeutics | Cumberland Pharmaceuticals vs. Soleno Therapeutics | Cumberland Pharmaceuticals vs. Bio Path Holdings | Cumberland Pharmaceuticals vs. Moleculin Biotech |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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