Correlation Between Jaguar Animal and Acasti Pharma

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

By analyzing existing cross correlation between Jaguar Animal Health and Acasti Pharma, you can compare the effects of market volatilities on Jaguar Animal and Acasti Pharma 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 Jaguar Animal with a short position of Acasti Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaguar Animal and Acasti Pharma.

Diversification Opportunities for Jaguar Animal and Acasti Pharma

-0.75

Correlation Coefficient

Jaguar Animal  Acasti Pharma

Pay attention - limited upside

The 3 months correlation between Jaguar and Acasti is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Jaguar Animal Health and Acasti Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acasti Pharma and Jaguar Animal 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 Jaguar Animal Health are associated (or correlated) with Acasti Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acasti Pharma has no effect on the direction of Jaguar Animal i.e., Jaguar Animal and Acasti Pharma go up and down completely randomly.

Pair Corralation between Jaguar Animal and Acasti Pharma

Given the investment horizon of 90 days Jaguar Animal Health is expected to under-perform the Acasti Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Jaguar Animal Health is 1.13 times less risky than Acasti Pharma. The stock trades about -0.01 of its potential returns per unit of risk. The Acasti Pharma is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  250.00  in Acasti Pharma on September 4, 2024 and sell it today you would earn a total of  87.00  from holding Acasti Pharma or generate 34.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	60.94%
Values	Daily Returns

Jaguar Animal Health  vs.  Acasti Pharma

Jaguar Animal Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jaguar Animal Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Jaguar Animal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Acasti Pharma

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Acasti Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, Acasti Pharma unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jaguar Animal and Acasti Pharma

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

The idea behind Jaguar Animal Health and Acasti Pharma 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.