Correlation Between Fonar and Aclaris Therapeutics
Can any of the company-specific risk be diversified away by investing in both Fonar 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 Fonar and Aclaris Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fonar and Aclaris Therapeutics, you can compare the effects of market volatilities on Fonar 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 Fonar with a short position of Aclaris Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fonar and Aclaris Therapeutics.
Diversification Opportunities for Fonar and Aclaris Therapeutics
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fonar and Aclaris is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fonar and Aclaris Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclaris Therapeutics and Fonar 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 Fonar 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 Fonar i.e., Fonar and Aclaris Therapeutics go up and down completely randomly.
Pair Corralation between Fonar and Aclaris Therapeutics
Given the investment horizon of 90 days Fonar is expected to generate 20.49 times less return on investment than Aclaris Therapeutics. But when comparing it to its historical volatility, Fonar is 3.25 times less risky than Aclaris Therapeutics. It trades about 0.0 of its potential returns per unit of risk. 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 (1,119) from holding Aclaris Therapeutics or give up 73.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fonar vs. Aclaris Therapeutics
Performance |
| Timeline |
| Fonar |
| Aclaris Therapeutics |
Fonar and Aclaris Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fonar and Aclaris Therapeutics
The main advantage of trading using opposite Fonar and Aclaris Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fonar 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.| Fonar vs. Burning Rock Biotech | Fonar vs. Sera Prognostics | Fonar vs. Exagen Inc | Fonar vs. Castle Biosciences |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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