Correlation Between Adagene and ACRO Biomedical

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

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

Diversification Opportunities for Adagene and ACRO Biomedical

0.0

Correlation Coefficient

Adagene  ACRO Biomedical

Pay attention - limited upside

The 3 months correlation between Adagene and ACRO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and ACRO Biomedical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACRO Biomedical and Adagene 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 Adagene are associated (or correlated) with ACRO Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACRO Biomedical has no effect on the direction of Adagene i.e., Adagene and ACRO Biomedical go up and down completely randomly.

Pair Corralation between Adagene and ACRO Biomedical

If you would invest  0.10  in ACRO Biomedical Co on September 12, 2024 and sell it today you would earn a total of  0.00  from holding ACRO Biomedical Co or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Adagene  vs.  ACRO Biomedical Co

Adagene

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adagene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ACRO Biomedical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACRO Biomedical Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, ACRO Biomedical is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Adagene and ACRO Biomedical

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

The idea behind Adagene and ACRO Biomedical Co 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.