Correlation Between Acasti Pharma and Histogen

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

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

Diversification Opportunities for Acasti Pharma and Histogen

-0.87

Correlation Coefficient

Acasti Pharma  Histogen

Pay attention - limited upside

The 3 months correlation between Acasti and Histogen is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Acasti Pharma and Histogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Histogen and Acasti Pharma 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 Acasti Pharma are associated (or correlated) with Histogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Histogen has no effect on the direction of Acasti Pharma i.e., Acasti Pharma and Histogen go up and down completely randomly.

Pair Corralation between Acasti Pharma and Histogen

Given the investment horizon of 90 days Acasti Pharma is expected to generate 1.68 times less return on investment than Histogen. But when comparing it to its historical volatility, Acasti Pharma is 2.68 times less risky than Histogen. It trades about 0.03 of its potential returns per unit of risk. Histogen is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  85.00  in Histogen on September 23, 2024 and sell it today you would lose (82.23) from holding Histogen or give up 96.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	92.15%
Values	Daily Returns

Acasti Pharma  vs.  Histogen

Acasti Pharma

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Acasti Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, Acasti Pharma unveiled solid returns over the last few months and may actually be approaching a breakup point.

Histogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Histogen 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 very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Acasti Pharma and Histogen

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

The idea behind Acasti Pharma and Histogen 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..