Correlation Between Atlantic Coastal and Statera Biopharma

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

By analyzing existing cross correlation between Atlantic Coastal Acquisition and Statera Biopharma, you can compare the effects of market volatilities on Atlantic Coastal and Statera Biopharma 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 Atlantic Coastal with a short position of Statera Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic Coastal and Statera Biopharma.

Diversification Opportunities for Atlantic Coastal and Statera Biopharma

0.11

Correlation Coefficient

Atlantic Coastal  Statera Biopharma

Average diversification

The 3 months correlation between Atlantic and Statera is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Coastal Acquisition and Statera Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Statera Biopharma and Atlantic Coastal 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 Atlantic Coastal Acquisition are associated (or correlated) with Statera Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Statera Biopharma has no effect on the direction of Atlantic Coastal i.e., Atlantic Coastal and Statera Biopharma go up and down completely randomly.

Pair Corralation between Atlantic Coastal and Statera Biopharma

Assuming the 90 days horizon Atlantic Coastal Acquisition is expected to under-perform the Statera Biopharma. But the stock apears to be less risky and, when comparing its historical volatility, Atlantic Coastal Acquisition is 8.1 times less risky than Statera Biopharma. The stock trades about -0.02 of its potential returns per unit of risk. The Statera Biopharma is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Statera Biopharma on October 7, 2024 and sell it today you would lose (0.39) from holding Statera Biopharma or give up 9.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	3.69%
Values	Daily Returns

Atlantic Coastal Acquisition  vs.  Statera Biopharma

Atlantic Coastal Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlantic Coastal Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Statera Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Statera Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Statera Biopharma is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Atlantic Coastal and Statera Biopharma

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

The idea behind Atlantic Coastal Acquisition and Statera Biopharma 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.