Correlation Between Acumen Pharmaceuticals and Inter Parfums

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

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

Diversification Opportunities for Acumen Pharmaceuticals and Inter Parfums

-0.29

Correlation Coefficient

Acumen Pharmaceuticals  Inter Parfums

Very good diversification

The 3 months correlation between Acumen and Inter is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums 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 Inter Parfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Parfums has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Inter Parfums go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and Inter Parfums

Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Inter Parfums. In addition to that, Acumen Pharmaceuticals is 2.69 times more volatile than Inter Parfums. It trades about -0.02 of its total potential returns per unit of risk. Inter Parfums is currently generating about 0.18 per unit of volatility. If you would invest  11,505  in Inter Parfums on September 12, 2024 and sell it today you would earn a total of  2,338  from holding Inter Parfums or generate 20.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Acumen Pharmaceuticals  vs.  Inter Parfums

Acumen Pharmaceuticals

Risk-Adjusted Performance

0 of 100

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 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.

Inter Parfums

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Parfums are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Inter Parfums reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acumen Pharmaceuticals and Inter Parfums

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

The idea behind Acumen Pharmaceuticals and Inter Parfums 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.