Correlation Between Alimera Sciences and AcelRx Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Alimera Sciences and AcelRx 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 Alimera Sciences and AcelRx Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alimera Sciences and AcelRx Pharmaceuticals, you can compare the effects of market volatilities on Alimera Sciences and AcelRx 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 Alimera Sciences with a short position of AcelRx Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimera Sciences and AcelRx Pharmaceuticals.
Diversification Opportunities for Alimera Sciences and AcelRx Pharmaceuticals
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alimera and AcelRx is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Alimera Sciences and AcelRx Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcelRx Pharmaceuticals and Alimera Sciences 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 Alimera Sciences are associated (or correlated) with AcelRx Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcelRx Pharmaceuticals has no effect on the direction of Alimera Sciences i.e., Alimera Sciences and AcelRx Pharmaceuticals go up and down completely randomly.
Pair Corralation between Alimera Sciences and AcelRx Pharmaceuticals
Given the investment horizon of 90 days Alimera Sciences is expected to generate 0.98 times more return on investment than AcelRx Pharmaceuticals. However, Alimera Sciences is 1.02 times less risky than AcelRx Pharmaceuticals. It trades about 0.05 of its potential returns per unit of risk. AcelRx Pharmaceuticals is currently generating about -0.05 per unit of risk. If you would invest 316.00 in Alimera Sciences on August 30, 2024 and sell it today you would earn a total of 238.00 from holding Alimera Sciences or generate 75.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 34.99% |
| Values | Daily Returns |
Alimera Sciences vs. AcelRx Pharmaceuticals
Performance |
| Timeline |
| Alimera Sciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| AcelRx Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alimera Sciences and AcelRx Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimera Sciences and AcelRx Pharmaceuticals
The main advantage of trading using opposite Alimera Sciences and AcelRx Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimera Sciences position performs unexpectedly, AcelRx 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 AcelRx Pharmaceuticals will offset losses from the drop in AcelRx Pharmaceuticals' long position.| Alimera Sciences vs. Shuttle Pharmaceuticals | Alimera Sciences vs. Lifecore Biomedical | Alimera Sciences vs. Journey Medical Corp | Alimera Sciences vs. Organogenesis Holdings |
| AcelRx Pharmaceuticals vs. Lifecore Biomedical | AcelRx Pharmaceuticals vs. Shuttle Pharmaceuticals | AcelRx Pharmaceuticals vs. Catalent | AcelRx Pharmaceuticals vs. Tilray 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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