Correlation Between Acumen Pharmaceuticals and Cardiff Oncology

Can any of the company-specific risk be diversified away by investing in both Acumen Pharmaceuticals and Cardiff Oncology 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 Acumen Pharmaceuticals and Cardiff Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Acumen Pharmaceuticals and Cardiff Oncology, you can compare the effects of market volatilities on Acumen Pharmaceuticals and Cardiff Oncology 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 Acumen Pharmaceuticals with a short position of Cardiff Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acumen Pharmaceuticals and Cardiff Oncology.

Diversification Opportunities for Acumen Pharmaceuticals and Cardiff Oncology

0.59

Correlation Coefficient

Acumen Pharmaceuticals  Cardiff Oncology

Very weak diversification

The 3 months correlation between Acumen and Cardiff is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Cardiff Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiff Oncology and Acumen Pharmaceuticals 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 Acumen Pharmaceuticals are associated (or correlated) with Cardiff Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardiff Oncology has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Cardiff Oncology go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and Cardiff Oncology

Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Cardiff Oncology. But the stock apears to be less risky and, when comparing its historical volatility, Acumen Pharmaceuticals is 1.25 times less risky than Cardiff Oncology. The stock trades about -0.01 of its potential returns per unit of risk. The Cardiff Oncology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  175.00  in Cardiff Oncology on September 14, 2024 and sell it today you would earn a total of  152.00  from holding Cardiff Oncology or generate 86.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Acumen Pharmaceuticals  vs.  Cardiff Oncology

Acumen Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acumen Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Cardiff Oncology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cardiff Oncology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental indicators, Cardiff Oncology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acumen Pharmaceuticals and Cardiff Oncology

The main advantage of trading using opposite Acumen Pharmaceuticals and Cardiff Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acumen Pharmaceuticals position performs unexpectedly, Cardiff Oncology 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 Cardiff Oncology will offset losses from the drop in Cardiff Oncology's long position.

The idea behind Acumen Pharmaceuticals and Cardiff Oncology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.