Correlation Between Sotera Health and Aclaris Therapeutics
Can any of the company-specific risk be diversified away by investing in both Sotera Health 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 Sotera Health and Aclaris Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sotera Health Co and Aclaris Therapeutics, you can compare the effects of market volatilities on Sotera Health 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 Sotera Health with a short position of Aclaris Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sotera Health and Aclaris Therapeutics.
Diversification Opportunities for Sotera Health and Aclaris Therapeutics
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sotera and Aclaris is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sotera Health Co and Aclaris Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclaris Therapeutics and Sotera Health 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 Sotera Health Co 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 Sotera Health i.e., Sotera Health and Aclaris Therapeutics go up and down completely randomly.
Pair Corralation between Sotera Health and Aclaris Therapeutics
Considering the 90-day investment horizon Sotera Health Co is expected to under-perform the Aclaris Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Sotera Health Co is 6.25 times less risky than Aclaris Therapeutics. The stock trades about -0.3 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 |
Sotera Health Co vs. Aclaris Therapeutics
Performance |
| Timeline |
| Sotera Health |
| Aclaris Therapeutics |
Sotera Health and Aclaris Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sotera Health and Aclaris Therapeutics
The main advantage of trading using opposite Sotera Health and Aclaris Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sotera Health 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.| Sotera Health vs. Qiagen NV | Sotera Health vs. Aclaris Therapeutics | Sotera Health vs. Neogen | Sotera Health vs. RadNet Inc |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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