Correlation Between AC Immune and Protara Therapeutics

Can any of the company-specific risk be diversified away by investing in both AC Immune and Protara 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 AC Immune and Protara Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for AC Immune and Protara Therapeutics

-0.57

Correlation Coefficient

AC Immune  Protara Therapeutics

Excellent diversification

The 3 months correlation between ACIU and Protara is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding AC Immune and Protara Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protara Therapeutics and AC Immune 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 AC Immune are associated (or correlated) with Protara Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protara Therapeutics has no effect on the direction of AC Immune i.e., AC Immune and Protara Therapeutics go up and down completely randomly.

Pair Corralation between AC Immune and Protara Therapeutics

Given the investment horizon of 90 days AC Immune is expected to generate 1.65 times less return on investment than Protara Therapeutics. But when comparing it to its historical volatility, AC Immune is 1.1 times less risky than Protara Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Protara Therapeutics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  299.00  in Protara Therapeutics on September 30, 2024 and sell it today you would earn a total of  252.00  from holding Protara Therapeutics or generate 84.28% return on investment over 90 days.

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

AC Immune  vs.  Protara Therapeutics

AC Immune

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AC Immune has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Protara Therapeutics

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Protara Therapeutics are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Protara Therapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AC Immune and Protara Therapeutics

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

The idea behind AC Immune and Protara Therapeutics 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.