Correlation Between Acumen Pharmaceuticals and Regencell Bioscience

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

By analyzing existing cross correlation between Acumen Pharmaceuticals and Regencell Bioscience Holdings, you can compare the effects of market volatilities on Acumen Pharmaceuticals and Regencell Bioscience 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 Regencell Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acumen Pharmaceuticals and Regencell Bioscience.

Diversification Opportunities for Acumen Pharmaceuticals and Regencell Bioscience

0.31

Correlation Coefficient

Acumen Pharmaceuticals  Regencell Bioscience

Weak diversification

The 3 months correlation between Acumen and Regencell is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Regencell Bioscience Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regencell Bioscience 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 Regencell Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regencell Bioscience has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Regencell Bioscience go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and Regencell Bioscience

Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Regencell Bioscience. But the stock apears to be less risky and, when comparing its historical volatility, Acumen Pharmaceuticals is 2.03 times less risky than Regencell Bioscience. The stock trades about 0.0 of its potential returns per unit of risk. The Regencell Bioscience Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  655.00  in Regencell Bioscience Holdings on September 3, 2024 and sell it today you would lose (23.00) from holding Regencell Bioscience Holdings or give up 3.51% of portfolio value over 90 days.

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

Acumen Pharmaceuticals  vs.  Regencell Bioscience Holdings

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 comparatively stable basic indicators, Acumen Pharmaceuticals is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Regencell Bioscience

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regencell Bioscience Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Regencell Bioscience exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acumen Pharmaceuticals and Regencell Bioscience

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

The idea behind Acumen Pharmaceuticals and Regencell Bioscience Holdings 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.