Correlation Between Digi International and Acumen Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Digi International and Acumen 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 Digi International and Acumen Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Acumen Pharmaceuticals, you can compare the effects of market volatilities on Digi International and Acumen 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 Digi International with a short position of Acumen Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Acumen Pharmaceuticals.
Diversification Opportunities for Digi International and Acumen Pharmaceuticals
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Digi and Acumen is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and Acumen Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acumen Pharmaceuticals and Digi International 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 Digi International are associated (or correlated) with Acumen Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acumen Pharmaceuticals has no effect on the direction of Digi International i.e., Digi International and Acumen Pharmaceuticals go up and down completely randomly.
Pair Corralation between Digi International and Acumen Pharmaceuticals
Given the investment horizon of 90 days Digi International is expected to generate 0.49 times more return on investment than Acumen Pharmaceuticals. However, Digi International is 2.03 times less risky than Acumen Pharmaceuticals. It trades about 0.24 of its potential returns per unit of risk. Acumen Pharmaceuticals is currently generating about -0.2 per unit of risk. If you would invest 2,934 in Digi International on September 3, 2024 and sell it today you would earn a total of 388.00 from holding Digi International or generate 13.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. Acumen Pharmaceuticals
Performance |
| Timeline |
| Digi International |
| Acumen Pharmaceuticals |
Digi International and Acumen Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Acumen Pharmaceuticals
The main advantage of trading using opposite Digi International and Acumen Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International position performs unexpectedly, Acumen 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 Acumen Pharmaceuticals will offset losses from the drop in Acumen Pharmaceuticals' long position.| Digi International vs. Highway Holdings Limited | Digi International vs. QCR Holdings | Digi International vs. Partner Communications | Digi International vs. Acumen Pharmaceuticals |
| Acumen Pharmaceuticals vs. DiaMedica Therapeutics | Acumen Pharmaceuticals vs. Lyra Therapeutics | Acumen Pharmaceuticals vs. Centessa Pharmaceuticals PLC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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