Correlation Between ACELYRIN, INC and Windtree Therapeutics

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

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

Diversification Opportunities for ACELYRIN, INC and Windtree Therapeutics

0.28

Correlation Coefficient

ACELYRIN, INC  Windtree Therapeutics

Modest diversification

The 3 months correlation between ACELYRIN, and Windtree is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding ACELYRIN, INC Common and Windtree Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Windtree Therapeutics and ACELYRIN, INC 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 ACELYRIN, INC Common are associated (or correlated) with Windtree Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Windtree Therapeutics has no effect on the direction of ACELYRIN, INC i.e., ACELYRIN, INC and Windtree Therapeutics go up and down completely randomly.

Pair Corralation between ACELYRIN, INC and Windtree Therapeutics

Given the investment horizon of 90 days ACELYRIN, INC Common is expected to generate 0.5 times more return on investment than Windtree Therapeutics. However, ACELYRIN, INC Common is 2.0 times less risky than Windtree Therapeutics. It trades about -0.05 of its potential returns per unit of risk. Windtree Therapeutics is currently generating about -0.05 per unit of risk. If you would invest  2,021  in ACELYRIN, INC Common on September 30, 2024 and sell it today you would lose (1,696) from holding ACELYRIN, INC Common or give up 83.92% of portfolio value over 90 days.

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

ACELYRIN, INC Common  vs.  Windtree Therapeutics

ACELYRIN, INC Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACELYRIN, INC Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Windtree Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Windtree Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic 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.

Pair Trading with ACELYRIN, INC and Windtree Therapeutics

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

The idea behind ACELYRIN, INC Common and Windtree 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.