Correlation Between Acer Therapeutics and Biophytis
Can any of the company-specific risk be diversified away by investing in both Acer Therapeutics and Biophytis 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 Acer Therapeutics and Biophytis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acer Therapeutics and Biophytis, you can compare the effects of market volatilities on Acer Therapeutics and Biophytis 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 Acer Therapeutics with a short position of Biophytis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acer Therapeutics and Biophytis.
Diversification Opportunities for Acer Therapeutics and Biophytis
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Acer and Biophytis is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Acer Therapeutics and Biophytis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biophytis and Acer Therapeutics 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 Acer Therapeutics are associated (or correlated) with Biophytis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biophytis has no effect on the direction of Acer Therapeutics i.e., Acer Therapeutics and Biophytis go up and down completely randomly.
Pair Corralation between Acer Therapeutics and Biophytis
Given the investment horizon of 90 days Acer Therapeutics is expected to under-perform the Biophytis. But the stock apears to be less risky and, when comparing its historical volatility, Acer Therapeutics is 1.43 times less risky than Biophytis. The stock trades about -0.07 of its potential returns per unit of risk. The Biophytis is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 15,800 in Biophytis on September 20, 2024 and sell it today you would lose (15,097) from holding Biophytis or give up 95.55% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 37.6% |
Values | Daily Returns |
Acer Therapeutics vs. Biophytis
Performance |
Timeline |
Acer Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Biophytis |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Acer Therapeutics and Biophytis Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Acer Therapeutics and Biophytis
The main advantage of trading using opposite Acer Therapeutics and Biophytis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acer Therapeutics position performs unexpectedly, Biophytis 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 Biophytis will offset losses from the drop in Biophytis' long position.Acer Therapeutics vs. NRx Pharmaceuticals | Acer Therapeutics vs. Pasithea Therapeutics Corp | Acer Therapeutics vs. SAB Biotherapeutics | Acer Therapeutics vs. Lexaria Bioscience Corp |
Biophytis vs. NRx Pharmaceuticals | Biophytis vs. NRX Pharmaceuticals | Biophytis vs. Akari Therapeutics PLC | Biophytis vs. Armata Pharmaceuticals |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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