Correlation Between Aclaris Therapeutics and Fonar

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

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

Diversification Opportunities for Aclaris Therapeutics and Fonar

0.75

Correlation Coefficient

Aclaris Therapeutics  Fonar

Poor diversification

The 3 months correlation between Aclaris and Fonar is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aclaris Therapeutics and Fonar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonar and Aclaris 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 Aclaris Therapeutics are associated (or correlated) with Fonar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonar has no effect on the direction of Aclaris Therapeutics i.e., Aclaris Therapeutics and Fonar go up and down completely randomly.

Pair Corralation between Aclaris Therapeutics and Fonar

Given the investment horizon of 90 days Aclaris Therapeutics is expected to under-perform the Fonar. In addition to that, Aclaris Therapeutics is 1.67 times more volatile than Fonar. It trades about -0.22 of its total potential returns per unit of risk. Fonar is currently generating about -0.04 per unit of volatility. If you would invest  1,498  in Fonar on December 29, 2024 and sell it today you would lose (84.00) from holding Fonar or give up 5.61% of portfolio value over 90 days.

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

Aclaris Therapeutics  vs.  Fonar

Aclaris Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aclaris Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile 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.

Fonar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fonar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Fonar is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Aclaris Therapeutics and Fonar

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

The idea behind Aclaris Therapeutics and Fonar 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.