Correlation Between Acumen Pharmaceuticals and ScanSource

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

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

Diversification Opportunities for Acumen Pharmaceuticals and ScanSource

-0.08

Correlation Coefficient

Acumen Pharmaceuticals  ScanSource

Good diversification

The 3 months correlation between Acumen and ScanSource is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and ScanSource go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and ScanSource

Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the ScanSource. In addition to that, Acumen Pharmaceuticals is 1.95 times more volatile than ScanSource. It trades about 0.0 of its total potential returns per unit of risk. ScanSource is currently generating about 0.04 per unit of volatility. If you would invest  4,862  in ScanSource on September 2, 2024 and sell it today you would earn a total of  179.00  from holding ScanSource or generate 3.68% 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.  ScanSource

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

ScanSource

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ScanSource is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Acumen Pharmaceuticals and ScanSource

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

The idea behind Acumen Pharmaceuticals and ScanSource 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 Transaction History module to view history of all your transactions and understand their impact on performance.