Correlation Between Acumen Pharmaceuticals and Asbury Automotive

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Can any of the company-specific risk be diversified away by investing in both Acumen Pharmaceuticals and Asbury Automotive 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 Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acumen Pharmaceuticals and Asbury Automotive Group, you can compare the effects of market volatilities on Acumen Pharmaceuticals and Asbury Automotive 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 Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acumen Pharmaceuticals and Asbury Automotive.

Diversification Opportunities for Acumen Pharmaceuticals and Asbury Automotive

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between Acumen and Asbury is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive 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 Asbury Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asbury Automotive has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Asbury Automotive go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and Asbury Automotive

Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Asbury Automotive. In addition to that, Acumen Pharmaceuticals is 2.69 times more volatile than Asbury Automotive Group. It trades about -0.01 of its total potential returns per unit of risk. Asbury Automotive Group is currently generating about 0.12 per unit of volatility. If you would invest  24,704  in Asbury Automotive Group on October 25, 2024 and sell it today you would earn a total of  957.00  from holding Asbury Automotive Group or generate 3.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Acumen Pharmaceuticals  vs.  Asbury Automotive Group

 Performance 
       Timeline  
Acumen Pharmaceuticals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Asbury Automotive 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Asbury Automotive Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental drivers, Asbury Automotive reported solid returns over the last few months and may actually be approaching a breakup point.

Acumen Pharmaceuticals and Asbury Automotive Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Acumen Pharmaceuticals and Asbury Automotive

The main advantage of trading using opposite Acumen Pharmaceuticals and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acumen Pharmaceuticals position performs unexpectedly, Asbury Automotive 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 Asbury Automotive will offset losses from the drop in Asbury Automotive's long position.
The idea behind Acumen Pharmaceuticals and Asbury Automotive Group 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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