Correlation Between Burning Rock and Aclaris Therapeutics
Can any of the company-specific risk be diversified away by investing in both Burning Rock and Aclaris 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 Burning Rock and Aclaris Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burning Rock Biotech and Aclaris Therapeutics, you can compare the effects of market volatilities on Burning Rock and Aclaris 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 Burning Rock with a short position of Aclaris Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burning Rock and Aclaris Therapeutics.
Diversification Opportunities for Burning Rock and Aclaris Therapeutics
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Burning and Aclaris is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Burning Rock Biotech and Aclaris Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclaris Therapeutics and Burning Rock 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 Burning Rock Biotech are associated (or correlated) with Aclaris Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aclaris Therapeutics has no effect on the direction of Burning Rock i.e., Burning Rock and Aclaris Therapeutics go up and down completely randomly.
Pair Corralation between Burning Rock and Aclaris Therapeutics
Considering the 90-day investment horizon Burning Rock Biotech is expected to under-perform the Aclaris Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Burning Rock Biotech is 1.36 times less risky than Aclaris Therapeutics. The stock trades about -0.05 of its potential returns per unit of risk. The Aclaris Therapeutics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,518 in Aclaris Therapeutics on August 28, 2024 and sell it today you would lose (1,155) from holding Aclaris Therapeutics or give up 76.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burning Rock Biotech vs. Aclaris Therapeutics
Performance |
| Timeline |
| Burning Rock Biotech |
| Aclaris Therapeutics |
Burning Rock and Aclaris Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burning Rock and Aclaris Therapeutics
The main advantage of trading using opposite Burning Rock and Aclaris Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burning Rock position performs unexpectedly, Aclaris 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 Aclaris Therapeutics will offset losses from the drop in Aclaris Therapeutics' long position.| Burning Rock vs. Fonar | Burning Rock vs. Sera Prognostics | Burning Rock vs. Neuronetics | Burning Rock vs. DarioHealth Corp |
| Aclaris Therapeutics vs. Neogen | Aclaris Therapeutics vs. Qiagen NV | Aclaris Therapeutics vs. Sotera Health Co | Aclaris Therapeutics 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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