Correlation Between Acumen Pharmaceuticals and Petros Pharmaceuticals

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

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

Diversification Opportunities for Acumen Pharmaceuticals and Petros Pharmaceuticals

0.91

Correlation Coefficient

Acumen Pharmaceuticals  Petros Pharmaceuticals

Almost no diversification

The 3 months correlation between Acumen and Petros is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Petros Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petros Pharmaceuticals 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 Petros Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petros Pharmaceuticals has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Petros Pharmaceuticals go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and Petros Pharmaceuticals

Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Petros Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Acumen Pharmaceuticals is 5.48 times less risky than Petros Pharmaceuticals. The stock trades about -0.14 of its potential returns per unit of risk. The Petros Pharmaceuticals is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  37.00  in Petros Pharmaceuticals on December 28, 2024 and sell it today you would lose (26.00) from holding Petros Pharmaceuticals or give up 70.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.36%
Values	Daily Returns

Acumen Pharmaceuticals  vs.  Petros Pharmaceuticals

Acumen Pharmaceuticals

Risk-Adjusted Performance

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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Petros Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Petros Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Acumen Pharmaceuticals and Petros Pharmaceuticals

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

The idea behind Acumen Pharmaceuticals and Petros Pharmaceuticals 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.