Correlation Between Glucose Health and ACRX Old

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

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

Diversification Opportunities for Glucose Health and ACRX Old

-0.75

Correlation Coefficient

Glucose Health  ACRX Old

Pay attention - limited upside

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

Pair Corralation between Glucose Health and ACRX Old

Given the investment horizon of 90 days Glucose Health is expected to generate 1.82 times more return on investment than ACRX Old. However, Glucose Health is 1.82 times more volatile than ACRX Old. It trades about 0.03 of its potential returns per unit of risk. ACRX Old is currently generating about -0.07 per unit of risk. If you would invest  55.00  in Glucose Health on October 10, 2024 and sell it today you would lose (41.00) from holding Glucose Health or give up 74.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	26.76%
Values	Daily Returns

Glucose Health  vs.  ACRX Old

Glucose Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glucose Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak basic indicators, Glucose Health may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ACRX Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACRX Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ACRX Old is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Glucose Health and ACRX Old

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

The idea behind Glucose Health and ACRX Old 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.