Correlation Between Acumen Pharmaceuticals and Radcom

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

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

Diversification Opportunities for Acumen Pharmaceuticals and Radcom

0.1

Correlation Coefficient

Acumen Pharmaceuticals  Radcom

Average diversification

The 3 months correlation between Acumen and Radcom is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom 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 Radcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radcom has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Radcom go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and Radcom

Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Radcom. But the stock apears to be less risky and, when comparing its historical volatility, Acumen Pharmaceuticals is 1.02 times less risky than Radcom. The stock trades about -0.13 of its potential returns per unit of risk. The Radcom is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,188  in Radcom on December 28, 2024 and sell it today you would earn a total of  28.00  from holding Radcom or generate 2.36% return on investment over 90 days.

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

Acumen Pharmaceuticals  vs.  Radcom

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.

Radcom

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Radcom may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Acumen Pharmaceuticals and Radcom

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

The idea behind Acumen Pharmaceuticals and Radcom 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.