Correlation Between Acumen Pharmaceuticals and Cyteir Therapeutics

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

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

Diversification Opportunities for Acumen Pharmaceuticals and Cyteir Therapeutics

-0.54

Correlation Coefficient

Acumen Pharmaceuticals  Cyteir Therapeutics

Excellent diversification

The 3 months correlation between Acumen and Cyteir is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Cyteir Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyteir Therapeutics 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 Cyteir Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyteir Therapeutics has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Cyteir Therapeutics go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and Cyteir Therapeutics

If you would invest  240.00  in Acumen Pharmaceuticals on September 4, 2024 and sell it today you would lose (5.00) from holding Acumen Pharmaceuticals or give up 2.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Acumen Pharmaceuticals  vs.  Cyteir Therapeutics

Acumen Pharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Acumen Pharmaceuticals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Acumen Pharmaceuticals is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Cyteir Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cyteir Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cyteir Therapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Acumen Pharmaceuticals and Cyteir Therapeutics

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

The idea behind Acumen Pharmaceuticals and Cyteir 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 Global Correlations module to find global opportunities by holding instruments from different markets.