Correlation Between NYSE Composite and Acasti Pharma
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Acasti Pharma 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 NYSE Composite and Acasti Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Acasti Pharma, you can compare the effects of market volatilities on NYSE Composite and Acasti Pharma 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 NYSE Composite with a short position of Acasti Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Acasti Pharma.
Diversification Opportunities for NYSE Composite and Acasti Pharma
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Acasti is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Acasti Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acasti Pharma and NYSE Composite 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 NYSE Composite are associated (or correlated) with Acasti Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acasti Pharma has no effect on the direction of NYSE Composite i.e., NYSE Composite and Acasti Pharma go up and down completely randomly.
Pair Corralation between NYSE Composite and Acasti Pharma
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.19 times more return on investment than Acasti Pharma. However, NYSE Composite is 5.15 times less risky than Acasti Pharma. It trades about 0.11 of its potential returns per unit of risk. Acasti Pharma is currently generating about 0.01 per unit of risk. If you would invest 1,766,949 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 260,255 from holding NYSE Composite or generate 14.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 87.77% |
Values | Daily Returns |
NYSE Composite vs. Acasti Pharma
Performance |
Timeline |
NYSE Composite and Acasti Pharma Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Acasti Pharma
Pair trading matchups for Acasti Pharma
Pair Trading with NYSE Composite and Acasti Pharma
The main advantage of trading using opposite NYSE Composite and Acasti Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Acasti Pharma 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 Acasti Pharma will offset losses from the drop in Acasti Pharma's long position.NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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