Correlation Between Fulcrum Therapeutics and Acumen Pharmaceuticals

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

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

Diversification Opportunities for Fulcrum Therapeutics and Acumen Pharmaceuticals

-0.73

Correlation Coefficient

Fulcrum Therapeutics  Acumen Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Fulcrum and Acumen is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Therapeutics and Acumen Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acumen Pharmaceuticals and Fulcrum 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 Fulcrum Therapeutics 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 Fulcrum Therapeutics i.e., Fulcrum Therapeutics and Acumen Pharmaceuticals go up and down completely randomly.

Pair Corralation between Fulcrum Therapeutics and Acumen Pharmaceuticals

Given the investment horizon of 90 days Fulcrum Therapeutics is expected to generate 1.12 times more return on investment than Acumen Pharmaceuticals. However, Fulcrum Therapeutics is 1.12 times more volatile than Acumen Pharmaceuticals. It trades about 0.0 of its potential returns per unit of risk. Acumen Pharmaceuticals is currently generating about -0.02 per unit of risk. If you would invest  1,241  in Fulcrum Therapeutics on October 26, 2024 and sell it today you would lose (825.00) from holding Fulcrum Therapeutics or give up 66.48% of portfolio value over 90 days.

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

Fulcrum Therapeutics  vs.  Acumen Pharmaceuticals

Fulcrum Therapeutics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fulcrum Therapeutics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain essential indicators, Fulcrum Therapeutics exhibited solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Fulcrum Therapeutics and Acumen Pharmaceuticals

The main advantage of trading using opposite Fulcrum Therapeutics and Acumen Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulcrum Therapeutics 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 Fulcrum Therapeutics 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.