Correlation Between Olink Holding and Aclaris Therapeutics
Can any of the company-specific risk be diversified away by investing in both Olink Holding 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 Olink Holding and Aclaris Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olink Holding AB and Aclaris Therapeutics, you can compare the effects of market volatilities on Olink Holding 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 Olink Holding with a short position of Aclaris Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olink Holding and Aclaris Therapeutics.
Diversification Opportunities for Olink Holding and Aclaris Therapeutics
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Olink and Aclaris is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Olink Holding AB and Aclaris Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclaris Therapeutics and Olink Holding 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 Olink Holding AB 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 Olink Holding i.e., Olink Holding and Aclaris Therapeutics go up and down completely randomly.
Pair Corralation between Olink Holding and Aclaris Therapeutics
Considering the 90-day investment horizon Olink Holding AB is expected to generate 0.61 times more return on investment than Aclaris Therapeutics. However, Olink Holding AB is 1.65 times less risky than Aclaris Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Aclaris Therapeutics is currently generating about 0.02 per unit of risk. If you would invest 2,200 in Olink Holding AB on August 24, 2024 and sell it today you would earn a total of 408.00 from holding Olink Holding AB or generate 18.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.85% |
| Values | Daily Returns |
Olink Holding AB vs. Aclaris Therapeutics
Performance |
| Timeline |
| Olink Holding AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Aclaris Therapeutics |
Olink Holding and Aclaris Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olink Holding and Aclaris Therapeutics
The main advantage of trading using opposite Olink Holding and Aclaris Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olink Holding 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.| Olink Holding vs. Fonar | Olink Holding vs. Burning Rock Biotech | Olink Holding vs. Sera Prognostics | Olink Holding vs. Psychemedics |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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