Correlation Between Aclaris Therapeutics and Psychemedics

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

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

Diversification Opportunities for Aclaris Therapeutics and Psychemedics

0.0

Correlation Coefficient

Aclaris Therapeutics  Psychemedics

Pay attention - limited upside

The 3 months correlation between Aclaris and Psychemedics is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aclaris Therapeutics and Psychemedics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Psychemedics 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 Psychemedics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Psychemedics has no effect on the direction of Aclaris Therapeutics i.e., Aclaris Therapeutics and Psychemedics go up and down completely randomly.

Pair Corralation between Aclaris Therapeutics and Psychemedics

If you would invest (100.00) in Psychemedics on December 31, 2024 and sell it today you would earn a total of  100.00  from holding Psychemedics or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Aclaris Therapeutics  vs.  Psychemedics

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 May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Psychemedics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Psychemedics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Psychemedics is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Aclaris Therapeutics and Psychemedics

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

The idea behind Aclaris Therapeutics and Psychemedics 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..