Correlation Between AmTrust Financial and Acumen Pharmaceuticals

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

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

Diversification Opportunities for AmTrust Financial and Acumen Pharmaceuticals

-0.29

Correlation Coefficient

AmTrust Financial  Acumen Pharmaceuticals

Very good diversification

The 3 months correlation between AmTrust and Acumen is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding AmTrust Financial Services and Acumen Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acumen Pharmaceuticals and AmTrust Financial 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 AmTrust Financial Services are associated (or correlated) with Acumen Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acumen Pharmaceuticals has no effect on the direction of AmTrust Financial i.e., AmTrust Financial and Acumen Pharmaceuticals go up and down completely randomly.

Pair Corralation between AmTrust Financial and Acumen Pharmaceuticals

Assuming the 90 days horizon AmTrust Financial Services is expected to generate 0.4 times more return on investment than Acumen Pharmaceuticals. However, AmTrust Financial Services is 2.53 times less risky than Acumen Pharmaceuticals. It trades about 0.05 of its potential returns per unit of risk. Acumen Pharmaceuticals is currently generating about 0.0 per unit of risk. If you would invest  1,273  in AmTrust Financial Services on September 23, 2024 and sell it today you would earn a total of  122.00  from holding AmTrust Financial Services or generate 9.58% return on investment over 90 days.

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

AmTrust Financial Services  vs.  Acumen Pharmaceuticals

AmTrust Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AmTrust Financial Services are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, AmTrust Financial is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Acumen Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acumen Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with AmTrust Financial and Acumen Pharmaceuticals

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

The idea behind AmTrust Financial Services and Acumen 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.