Correlation Between Karyopharm Therapeutics and Acumen Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Karyopharm Therapeutics 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 Karyopharm Therapeutics and Acumen Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karyopharm Therapeutics and Acumen Pharmaceuticals, you can compare the effects of market volatilities on Karyopharm Therapeutics 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 Karyopharm Therapeutics with a short position of Acumen Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karyopharm Therapeutics and Acumen Pharmaceuticals.
Diversification Opportunities for Karyopharm Therapeutics and Acumen Pharmaceuticals
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Karyopharm and Acumen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Karyopharm Therapeutics and Acumen Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acumen Pharmaceuticals and Karyopharm Therapeutics 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 Karyopharm Therapeutics 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 Karyopharm Therapeutics i.e., Karyopharm Therapeutics and Acumen Pharmaceuticals go up and down completely randomly.
Pair Corralation between Karyopharm Therapeutics and Acumen Pharmaceuticals
Given the investment horizon of 90 days Karyopharm Therapeutics is expected to under-perform the Acumen Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Karyopharm Therapeutics is 1.45 times less risky than Acumen Pharmaceuticals. The stock trades about -0.65 of its potential returns per unit of risk. The Acumen Pharmaceuticals is currently generating about -0.35 of returns per unit of risk over similar time horizon. If you would invest 236.00 in Acumen Pharmaceuticals on September 25, 2024 and sell it today you would lose (57.00) from holding Acumen Pharmaceuticals or give up 24.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karyopharm Therapeutics vs. Acumen Pharmaceuticals
Performance |
| Timeline |
| Karyopharm Therapeutics |
| Acumen Pharmaceuticals |
Karyopharm Therapeutics and Acumen Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karyopharm Therapeutics and Acumen Pharmaceuticals
The main advantage of trading using opposite Karyopharm Therapeutics and Acumen Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karyopharm Therapeutics 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.| Karyopharm Therapeutics vs. X4 Pharmaceuticals | Karyopharm Therapeutics vs. Hookipa Pharma | Karyopharm Therapeutics vs. Mereo BioPharma Group | Karyopharm Therapeutics vs. Acumen Pharmaceuticals |
| Acumen Pharmaceuticals vs. Fate Therapeutics | Acumen Pharmaceuticals vs. Caribou Biosciences | Acumen Pharmaceuticals vs. Karyopharm Therapeutics | Acumen Pharmaceuticals vs. X4 Pharmaceuticals |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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