Correlation Between Durect and Aclaris Therapeutics
Can any of the company-specific risk be diversified away by investing in both Durect 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 Durect and Aclaris Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Durect and Aclaris Therapeutics, you can compare the effects of market volatilities on Durect 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 Durect with a short position of Aclaris Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Durect and Aclaris Therapeutics.
Diversification Opportunities for Durect and Aclaris Therapeutics
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Durect and Aclaris is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Durect and Aclaris Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclaris Therapeutics and Durect 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 Durect 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 Durect i.e., Durect and Aclaris Therapeutics go up and down completely randomly.
Pair Corralation between Durect and Aclaris Therapeutics
Given the investment horizon of 90 days Durect is expected to under-perform the Aclaris Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Durect is 2.49 times less risky than Aclaris Therapeutics. The stock trades about -0.27 of its potential returns per unit of risk. The Aclaris Therapeutics is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 161.00 in Aclaris Therapeutics on August 27, 2024 and sell it today you would earn a total of 238.00 from holding Aclaris Therapeutics or generate 147.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Durect vs. Aclaris Therapeutics
Performance |
| Timeline |
| Durect |
| Aclaris Therapeutics |
Durect and Aclaris Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Durect and Aclaris Therapeutics
The main advantage of trading using opposite Durect and Aclaris Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Durect 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.| Durect vs. Shuttle Pharmaceuticals | Durect vs. Organogenesis Holdings | Durect vs. Alpha Teknova | Durect vs. Sonoma Pharmaceuticals |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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