Correlation Between Aceragen and Pieris Pharmaceuticals

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

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

Diversification Opportunities for Aceragen and Pieris Pharmaceuticals

0.25

Correlation Coefficient

Aceragen  Pieris Pharmaceuticals

Modest diversification

The 3 months correlation between Aceragen and Pieris is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Aceragen and Pieris Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pieris Pharmaceuticals and Aceragen 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 Aceragen are associated (or correlated) with Pieris Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pieris Pharmaceuticals has no effect on the direction of Aceragen i.e., Aceragen and Pieris Pharmaceuticals go up and down completely randomly.

Pair Corralation between Aceragen and Pieris Pharmaceuticals

Given the investment horizon of 90 days Aceragen is expected to under-perform the Pieris Pharmaceuticals. In addition to that, Aceragen is 1.48 times more volatile than Pieris Pharmaceuticals. It trades about -0.11 of its total potential returns per unit of risk. Pieris Pharmaceuticals is currently generating about -0.02 per unit of volatility. If you would invest  10,000  in Pieris Pharmaceuticals on October 7, 2024 and sell it today you would lose (8,640) from holding Pieris Pharmaceuticals or give up 86.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	27.12%
Values	Daily Returns

Aceragen  vs.  Pieris Pharmaceuticals

Aceragen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aceragen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Aceragen is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pieris Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pieris Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators 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.

Pair Trading with Aceragen and Pieris Pharmaceuticals

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

The idea behind Aceragen and Pieris 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.