Correlation Between Cumberland Pharmaceuticals and Allient
Can any of the company-specific risk be diversified away by investing in both Cumberland Pharmaceuticals and Allient 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 Cumberland Pharmaceuticals and Allient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cumberland Pharmaceuticals and Allient, you can compare the effects of market volatilities on Cumberland Pharmaceuticals and Allient 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 Cumberland Pharmaceuticals with a short position of Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumberland Pharmaceuticals and Allient.
Diversification Opportunities for Cumberland Pharmaceuticals and Allient
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cumberland and Allient is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cumberland Pharmaceuticals and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Cumberland Pharmaceuticals i.e., Cumberland Pharmaceuticals and Allient go up and down completely randomly.
Pair Corralation between Cumberland Pharmaceuticals and Allient
Given the investment horizon of 90 days Cumberland Pharmaceuticals is expected to under-perform the Allient. In addition to that, Cumberland Pharmaceuticals is 1.26 times more volatile than Allient. It trades about -0.02 of its total potential returns per unit of risk. Allient is currently generating about -0.01 per unit of volatility. If you would invest 3,561 in Allient on August 28, 2024 and sell it today you would lose (1,032) from holding Allient or give up 28.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumberland Pharmaceuticals vs. Allient
Performance |
| Timeline |
| Cumberland Pharmaceuticals |
| Allient |
Cumberland Pharmaceuticals and Allient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumberland Pharmaceuticals and Allient
The main advantage of trading using opposite Cumberland Pharmaceuticals and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumberland Pharmaceuticals position performs unexpectedly, Allient 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 Allient will offset losses from the drop in Allient's long position.| Cumberland Pharmaceuticals vs. Capricor Therapeutics | Cumberland Pharmaceuticals vs. Soleno Therapeutics | Cumberland Pharmaceuticals vs. Bio Path Holdings | Cumberland Pharmaceuticals vs. Moleculin Biotech |
| Allient vs. Pentair PLC | Allient vs. Agnico Eagle Mines | Allient vs. Eldorado Gold Corp | Allient vs. Air Lease |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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